The China Banking Regulatory Commission (CBRC) last week asked state-controlled banks to assess their credit exposure to several Chinese companies involved in overseas acquisitions, ifølge Caixin, a respected mainland Chinese business magazine. A few banks reduced their holdings of bonds related to these companies.

Companies targeted by the regulator include Anbang Insurance Group Co., Dalian Wanda Group, HNA Group, Fosun International, and a unit of Zhejiang Luosen which acquired Italy’s AC Milan soccer team in April. The action caused a dramatic selloff of the stocks and bonds of the affected companies last week.

While results of this particular regulatory action are yet to be concluded, CBRC’s scrutiny of China’s biggest overseas acquirers is the latest in a string of crackdowns within the financial sector. Sources close to Zhongnanhai, det kinesiske kommunistparti (CCP)’s central headquarters, told The Epoch Times earlier this year that the Xi leadership is focusing on tackling corruption in the Chinese financial industry in 2017.

I februar, Xiao Jianhua, influential billionaire investor and founder of Tomorrow Group, was brought from Hong Kong to Beijingfor official questioning. I april, the former head of China Insurance Regulatory Commission Xiang Junbo wasplaced under investigation. Tidligere i denne måned, Wu Xiaohui, chairman of Anbang Insurance Group, var detained by authorities i Beijing.

Voracious Acquirers

Anbang, Wanda, HNA, and Fosun are some of the most active and aggressive bidders for overseas assets.

Sammen, these four companies bought $56 billion in foreign companies over the past five years, according to analysisfrom the Financial Times. The massive capital flight as a result has contributed to devaluation of the Chinese currency—already pressured by a slowing Chinese economy—while increasing the balance sheets of overleveraged Chinese banks.

All four companies have something in common—they’re all privately owned.

Wang Jianlin, founder and chairman of real estate and entertainment conglomerate Wanda and one of China’s richest individuals, has bought Hollywood production studio Legendary Entertainment Group, cinema chain AMC Entertainment, and luxury hotels and residential developments across the UK, Australien, and United States. Wanda has extensive connections and influence in Hollywood and is a main conduit of China’ssoft power projection.

Billionaire Chen Feng built HNA Group from a regional airline in the resort island of Hainan into one of the world’s most acquisitive conglomerates during the last few years. HNA has holdings across the aviation, tourism, logistics industries, and owns California-based technology distributor Ingram Micro Inc. HNA has large stakes in Hilton Hotels, cargo handler Swissport, and is also the biggest single shareholder (med 9.9 percent ownership) in Deutsche Bank AG, the German international banking giant.

Anbang Forsikring, whose chairman Wu Xiaohui was detained by authorities earlier this month, owns theWaldorf-Astoria Hotelin New York, and has several high-profile real estate holdings across the United States, Canada, and Europe.

Opaque Ownership Structures and Capital Sources

All four companies have something in common—they’re all privately owned.

And some of the companies have complex and opaque ownership structures, as well as highly leveraged capital sources.

HNA’s ownership structure is a complex web of investment trusts, provincial and local government agencies, and small business ventures. Thirteen individuals ultimately control 76 percent of the company through intermediary companies. Chen Feng, the public face of the company, controls 15 percent of HNA and has connections with former presidential candidate Jeb Bush and American investor George Soros. HNA’s biggest owner, Guan Jun (with a 29 percent stake), doesn’t work for the company and is a relative unknown. Listed addresses for Guan through various public filings and records include a side street beauty salon in western Beijing, a shabby Beijing office building, and a nondescript apartment building in southwest Beijing, ifølge the Financial Times.

HNA is also highly indebted. Ved udgangen af 2014, HNA had a combined debt of 196.9 milliarder yuan ($29.5 milliarder) on its balance sheet, compared to only 73.2 milliarder yuan ($10.9 milliarder) of equity, according to prospectuses filed with the Irish securities regulators in connection with a 2015 $1 billion bond offering of one of its subsidiaries.

Anbang Insurance’s funds come from sales of controversial high-yield products called universal life policies, or risky wealth management products which combine bonds and life insurance policies. These products differ from typical annuities as they promise very high returns to investors, something typical insurance companies cannot justify given the conservative nature of their asset holdings. Sales of such products have been recently banned by the Chinese insurance regulator.

Anbang’s capital base suddenly swelled in 2014, with a number of mysterious investors injecting a total of 50 billion yuan into the company. Research by Caixin found that some of Anbang’s 39 investors are obscure outfits such as auto dealerships, real estate firms, and mine operators that sometimes use shared mailing addresses, many of which are connected to Wu. There’s also a trend of major state-level investors scaling back their ownership, with SAIC Motor and Sinopec decreasing their ownership levels from 20 percent each to 1.2 procent og 0.5 procent, henholdsvis.

Intersection of Business and Politics

Business and politics in the Chinese regime have always been closely intertwined. And Anbang chairman Wu Xiaohui’s detention earlier this month appears to be partially politically motivated.

A source close to high-level discussions in Zhongnanhai told The Epoch Times that Wu has close ties to the family of Zeng Qinghong, the former Chinese vice chairman and right-hand man of former Communist Party boss Jiang Zemin.

Jiang headed the CCP for more than a dozen years (1989–2002) and continued holding sway over the Chinese regime through a network of cronies for another 10 år (2002–2012). Since entering office in 2012, Xi has sought to uproot the influence of Jiang and his faction, who oppose Xi, and consolidate his control over the Chinese regime.

The source said that Wu used financial transactions to funnel and launder funds abroad on behalf of the Jiang faction, while at the same time using his role as a business tycoon to spy on and influence foreign dignitaries.

Whether last week’s inquiry into China’s other major overseas asset acquirers is connected to the reining in of powerful Chinese financiers ahead of a CCP’s 19th National Congress, a key political conclave to be held at the end of the year, is still unclear. For nu, major Chinese state-controlled banks have declared no intention of ending relationships with or cutting credit to these companies.

Ikke desto mindre, investors were rattled by the regulatory announcement.

HNA Holding Group stock fell 6 procent, while shares of Fosun International Ltd. fell almost 10 percent in Hong Kong on June 22. På den samme dag, Fosun Pharmaceutical, listed in Shanghai, fell around 8 procent, while the Shenzhen-listed Wanda Film dropped as much as 9.9 per cent in the morning and had to be temporarily halted from trading.

1

My father was born into an ordinary peasant family in Chaozhong village, Zhongjiang County, Sichuan Province. It was said that my grandmother had given birth to 12 børn, but only 9 survived. My father was the second eldest son in the family. With numerous younger brothers and sisters to look after, he was naturally expected to share the responsibility of supporting the family.

I didn’t have a chance to visit my father’s home village until the 1980’s, when I was already a high school student. Several of my uncles were still living in the shabby, old mud wall houses inherited from our ancestors, with literally no furniture inside, nor electricity. People still relied on dim kerosene lamps in the night.

To me, this kind of family should have fallen into the “absolute poverty” category. Imidlertid, i 1949, when the Chinese Communist Party (CCP) categorized everyone in China into different classes after coming into power, my father’s family was classified as a “small land lessor.”

Jennifer Zeng (højre) with her two sisters in the 1980’s at Chaozhong village, Zhongjiang County, Sichuan Province in China. The mud wall house behind them was the family house passed on to many generations from their ancestors. Some of Jennifer’s uncles and many of her cousins are still living in this house and village today. (Provided by Jennifer Zeng)

I learnt the term “small land lessor” in 1973, when I was required to fill in the “personnel archive form” while enrolling into elementary school. One of the items to be filled was the “family class category on your father’s side.”

At that time a “personnel archive” was set up for everyone when you first enrolled into elementary school. All personal information was included in the archive files including all exam scores in the school, all the comments your teacher wrote about you, all your family situations, and all the good and bad things about you.

Everywhere you went, this archive followed. But you were not allowed to view the contents or know what was actually inside. It was only meant for the Party to know everything about everybody.

As a 6-year-old, grade-one student, I already knew that there were a “class of landlords” and a “class of poor and the lower-middle peasants,” but I didn’t understand what a “small land lessor” was. I then asked my mother, who immediately said indignantly, “It was unfair! There were so many brothers and sisters in your father’s family. Overall, they didn’t own much land. If it were calculated based on the average land area per person, your father’s family should have been categorized as ‘middle peasants’ at most. Only because they had hired people to help farming the land, they were categorized as a ‘small land lessor,’ which was unfairly high!"

In the 1990s’Jennifer revisited her relatives who still lived in the village. The old family house remained unchanged. (Provided by Jennifer Zeng)

I didn’t fully understand mother’s explanation. Imidlertid, I somehow already knew that it was a terrible thing if you were ranked “high” in the “class category.” At that time, the grandfather of a girl in our class was a landlord; and the entire class looked down upon that girl.

Once I went to her home, and unintentionally saw an old man in a black cotton-padded coat sitting in the corner quietly. I realized that this must be her landlord grandfather. Immediately I was struck with fear, as if having seen a monster. I hastily made up an excuse and fled her home as fast as I could.

Fortunately enough, the social class category of my mother’s side was “poor people in the city,” which was part of the “proletariat.” This gratefully evened up my father’s “high category” a little bit.

My mother’s parents got divorced soon after she was born; and she was adopted by another family. Actually, my mother’s foster father was once a “capitalist,” who owned a brewery and a shop in Zhongjiang County. My father actually came to know my mother when he worked in that shop as an apprentice.

Later on, my mother’s foster father became addicted to opium. As a result, he spent all his wealth. When the CCP took power in 1949 and gave everyone a “social class category,” he was therefore classified as “poor people in the city.”

From then on he often boasted in front of my mother and my grandmother, “Do you think it would have been so easy for you to become part of the ‘proletariat’ if it weren’t for me?"

2

My father had some private schooling when he was young. When he was older, he had to attend school, which was very far from home. Every day, he needed to finish all his homework at school, as his time after school belonged to family duties, including weaving a certain amount of fabric, which was to be sold at a farmers’ market every ten to fifteen days.

When he became a teenager, my father insisted on going to the capital city of the county to study. My grandmother didn’t want him to go, as he was much needed at home. She figured: if we find him a wife and get him married, he would then stay, become a strong farmer for the family, and then raise his own children to carry on the family line.

Therefore, they managed to find a girl for him. When he went on an arranged blind date, my father saw that the girl had a “pig-belly” shaped face, and instantly disliked her. With much determination, he refused this marriage arrangement; and overtook many difficulties before he was finally able to go to the capital city, where he eventually met my mother.

When my father told me this story, there was always an unnoticeable trace of contempt on his face. I always thought to myself: How lucky! If father had married that “pig-belly” faced woman, wouldn’t he have been “trapped” in the countryside? If that were the case, there would have never been such a person as me in this world. Therefore, I have never thought highly of anybody who had a “pig-belly” shaped face, no matter how others praised her for being beautiful.

Imidlertid, I had never figured out: as a mere teenager, why my father could be so determined about gaining more education when the entire family was against this.

Profile photo of Jennifer Zeng’s father at university. Ever since Jennifer’s childhood, she has believed that this is what a handsome man should look like. (Provided by Jennifer Zeng)

My mother later told me that my father was the eldest student in his class. As a fourth grader at the elementary school, he was already 18 år gammel. He studied very hard and showed various talents in different areas. He was good at singing, playing musical instruments, basketball, swimming, calligraphy and writing. The essays he wrote were spread amongst the students in the entire county as good examples; and my mother had also read them in school. Så, my father was quite a figure even then!

3

In the 1960’s, at the age of 27, my father was admitted to the Southwest University of Political Science & Law in Sichuan Province; and thus became the first ever university student in his village. This caused quite a sensation among all the villagers.

As far as I can remember, father only told me one story about his university life, and that was about a secret skill for obtaining one more bowl of rice.

When my father was attending university, China was experiencing the so-called “Three Years of Natural Disasters.” It should actually be called “The Three Years of the Great Chinese Famine,” when 20-43 millions were starved to death, according to some scholars.

My father said, when it was mealtime in the university, everybody ate in the dining hall, with eight people sitting at each table. Rice was supplied in a big pot for everyone to share.

At that time every student was so hungry and was ready to fight for food like a wolf. As soon as the pot was placed on the table, everybody immediately put as much as rice as possible into his own bowl, and then ate with all their might. Imidlertid, my father only filled half of his bowl, so he could always finish earlier than others. Then he would fill his bowl with rice as much as he could, and enjoyed it with ease and leisure. På denne måde, he could eat half a bowl more rice than others.

When he told me this story, my father smiled with pride, and an almost unnoticeable trace of cunning, which one could only see on the face of a Chinese peasant.

Imidlertid, I doubt how successful my father was with this kind of tactic. Mother told me that he suffered from hunger edema because of starvation and almost died in the hospital.

Jennifer’s father in university. (Provided by Jennifer Zeng)

My mother also told me that life was extremely hard for my father then. His family couldn’t offer him any financial support. Every weekend he had to work very hard as a loader at the Chaotianmen Port in Chongqing City, to earn some money to cover his most basic expenses.

I 1964, my father graduated from university and was assigned to work as a teacher at Mianyang Finance and Trade Cadres Training School in Sichuan Province. At that time my mother had been teaching for several years in a remote village primary school.

4

Although my mother’s foster-parents were “proletariat,” her biological mother later married someone who was classified by the CCP as a “thug.” As a result, my mother also became an outcast. She wasn’t allowed to go to high school after graduating from junior middle school. Going to university was even less possible for her.

As a very proud young girl, my mother felt too ashamed to face anybody. So she ran away from the city, hid in a remote village, and became an elementary school teacher there. At that time she was only 16 år gammel.

I 1965, my parents married each other, but they weren’t able to move to the same place. Their work places were about 100kms (om 62 miles) apart from each other. At that time, everything was controlled by the party; and nobody could just move to another place or change their jobs freely.

I 1966, I was born as their first child. And exactly at that year, the unprecedented “Great Proletarian Cultural Revolution” began.

I 1967, when I was only one year old, my father was accused of being a “black pawn of reactionary capitalist-roaders.”

At that time he had developed acute hepatitis and was hospitalized. Imidlertid, nobody cared about his illness. He was dragged from the hospital to the big stage to be publicly denounced. His hands were painted with black ink to indicate his identity as the “black pawn of reactionary capitalist-roaders”.

After the public denunciation, he was ordered to write dozens of copies of “self-criticism,” and to post them at appointed places.

I 1965, Jennifer’s parents married each other; but were not allowed to live together. (Provided by Jennifer Zeng)

As father was too weak to move at all, this grand task had to be accomplished by my mother, who was having maternity leave and staying with my father in Mianyang then. She tied me to her back with cotton tape, with a bucket of self-made flour paste in one hand, a big roll of dozens of “self-criticism” letters, which had been hand copied with a big brush pen in the other hand, and went out to post the letters. It took her the entire night to post them all.

When I was two or three-years-old, my father was relocated to a remote township called Hanwang in Mianzhu County, Sichuan Province. There were only about 30,000 people in the town, and it was also about 100 kms away from my mother’s school. The workplace for my father to “settle down to be reformed” was a cereal processing machinery factory, which was newly built on a barren floodplain, with barely anything inside it yet.

Jennifer’s mother holding one-year-old Jennifer. In the same year this photo was taken, Jennifer’s father was publicly denounced as a “black pawn of reactionary capitalist-roaders” during the “Great Proletarian Cultural Revolution,” and Jennifer’s mother had to tie Jennifer to her back and go out to post the “self-criticism” letters of Jennifer’s father, as required. (Provided by Jennifer Zeng)

5

My first sister was born when I was four years old. My mother couldn’t take care of two children on her own, as she also needed to work. So I was sent to my father, and started living on that barren floodplain with him

Every year my father would take me to visit my mother and sister. One hundred kilometers seems nothing for today. Imidlertid, it felt very, very far at that time, especially because my mother’s school was located in deep mountains.

We needed to transfer between long-distance buses several times; climb over several mountains; and walk long mountain tracks before we could reach our destiny.

My mother told me that she nearly cried when she saw me for the first time after I had left her. My lovely, round face shrank so much that it seemed that only two big twinkling eyes were left.

What my mother couldn’t bear was that my father only knew to wash and wipe my two cheeks; and left all other parts uncleaned. As a result, my neck and the skin behind my ears were left very dirty. My two sheep horn shape braids were also unbalanced, with one higher than the other. My mother felt extremely upset upon seeing her lovely daughter changed like that.

Jennifer’s mother, her two friends and two-year-old Jennifer. As the first child in the family, Jennifer enjoyed some “special” treatment such as having a doll of her own. After her two younger sisters were born, her parents no longer had the ability to buy more dolls for her sisters. (Provided by Jennifer Zeng)

Once after we had finished our stay at mum’s place and were about to leave, my mother gave me a letter, and asked me to give it to my father when we arrived at our other “home” at Hanwang.

I felt extremely excited at being entrusted with such an important task; and didn’t know how I should carry the letter to match its importance. The excitement went on for quite a while, before I finally couldn’t bear such a big burden or hide such huge a secret any more.

And the consequence was that I couldn’t help revealing the secret to my father after we walked along the mountain road and were waiting for the long-distance bus.

After reading the letter, my father didn’t say a word. He abruptly put me onto his back and started walking back. Upon arriving at mum’s place, my father still didn’t say anything. He lied down in bed with a very stern and pale face.

Jennifer still lived with her mother when she was three years old. (Provided by Jennifer Zeng)

I was really terrified, not knowing what had happened. I also feared that my mother would scold me for not listening to her and giving the letter to my father too early.

Only after many years did I learn vaguely what had happened on that day. My mother actually asked for a divorce in that letter, as she couldn’t bear the hardship of not being able to live together any longer.

I heard that my father tried everything, including a suicide threat, to have my mother abandon the thought of divorce.

Mother was very well known for her beauty in Zhongjiang County when she was young, and had a lot of admirers. My father was just one of them.

When he was in university, he kept writing beautiful letters and poems to her. Each time he wrote, he used a different font style. His handwriting and poems were both extremely beautiful and touching; and full of talent. His persistence and brilliant literary skill finally won my mother’s heart.

Imidlertid, my mother had never expected that one day this brilliant talent would become a “black pawn of reactionary capitalist-roaders” overnight. How long did she have to suffer as the wife of a “black pawn of reactionary capitalist-roaders”?

6

My mother was finally allowed to move and live with my father and me when I was in grade two at elementary school. At that time, I already had another younger sister. The five members of our family were finally able to live together in a small and crude bungalow type of house built on top of the floodplain.

Jennifer began living with her father when she was four. Her uneven braids and band in this photo were all the “artistry” of her father. The dress she wears was also hand-made by her father. Throughout Jennifer’s childhood, all the three sisters’ clothes were home-made. (Provided by Jennifer Zeng)

It was a time when people’s material and spiritual lives were both extremely lacking. My father was the only university graduate in his factory, while my mother taught at the primary school in the town. As an intellectual family, we belonged to the “five black classes.”

In a time when the “working class” was in charge of everything, our family was an “outcast” from whatever angle one looked at us.

To avoid possible trouble my mother didn’t encourage me even to play with other kids. If I became involved in a fight with other kids, this could be interpreted as a “class struggle” and implicate my parents. The whole family would then have an even harder time.

During many hot summer nights, when other kids were playing and enjoying the cool air outside, I shut myself inside alone at home. As there were way too many mosquitos in the still “wild” floodplain, I had to hide inside the mosquito net to read in the suffocating heat, while watching my perspiration dripping and leaving wet circles on the pages.

Reading was the only enjoyment during my childhood. Imidlertid, there were too few books to read. Many literary classics had been burnt as “poisonous weeds” before and during the “Cultural Revolution.”

In order to satisfy my desire to read, my father started writing children’s stories for me, and then gradually expanded his writing to other literary works such as novels. He was a great lover of literature.

My father wrote all his stories and novels on lined manuscript paper, and then bound them neatly with cotton thread, making them truly “thread-bound books,” with each of them absolutely the “only copy” in the world.

Most of the time, I was the first and only reader of my father’s literary works. Whenever my mother found out about my father’s writings, she would throw them into the fire, even if the stories were “pro-revolution” and catering to “the tide of the times,” such as “Little Red Guards Catching a Spy.”

My father never said a word when my mother burned his writings. Imidlertid, he would always bite his lower lip in a unique way with an expressionless face, and this would always make me feel extremely anxious and scared.

The only happy time then was Chinese New Year. My father’s calligraphy was very beautiful, and all the big banners in the factory were all hand-written by him. Many people would also ask him to write couplets for them to hang on their doors. Every year when Chinese New Year was approaching, he would definitely write a couplet for our own house.

He was also a very smart craftsman. Apart from knowing how to sew clothes, he also knew how to do carpentry work and make furniture. Many small pieces of furniture in our home were all made and painted by him, such as tables and stools.

When it was Chinese New Year, he would make beautiful things such as red lanterns or a rabbit shape light, with four small wheels underneath. My sisters and I would drag this rabbit light and swaggered through the street to show off this beautiful piece of artwork. All the children would look at us in admiration and awe, as they had never seen such a pretty rabbit light, nor could they ever dream about buying one from anywhere. Surrounded by those envious eyes, we felt extremely proud and wonderful!

7

One day when I was in the fourth grade in elementary school, a classmate suddenly whispered to me, “Jiang Qing is a big bad egg!"

I was really frightened by this “outrageous” claim. Isn’t Jiang Qing the “closest comrade-in-arms” and wife of “our Grand Leader Chairman Mao”? How can she be a “big bad egg”? How dare my classmate make such a frightening statement? Wouldn’t she be immediately regarded as an “active counter-revolutionary”?

But this frightening rumor turned out to be true very soon. The “Gang of Four” headed by Jiang Qing was really brought down. I didn’t know that this also meant that “the Great Proletarian Cultural Revolution,” which had brought endless disasters to millions of families, and which had caused more than 7 million deaths, had finally ended.

I only remember that as a member of the performing arts group in school, we were required to stand under the scorching sun to wait for the arrival of the “Selected Works of Mao Tse-Tung, Vol. 5", which would come from the faraway capital city of the county with big fanfare, loaded in big trucks and decorated with many red flags.

It was an extremely hot day. The sun was so fierce that even the tar on the road was melting. When the long convoy carrying “Selected Works of Mao Tse-Tung” finally arrived, we were asked to sing and dance to show our joy. Imidlertid, my shoes were glued by the melted ta,r and I couldn’t dance or walk at all, making me feel like crying.

8

After a period of time, I suddenly heard that the legal system, including the public security organs, procuratorial organs, and people’s courts, which were all “smashed” during the “Cultural Revolution,” were all to be restored, and that people with professional knowledge were highly demanded. As a result, my father, who graduated from the Southwest University of Political Science & Law, was going to be transferred back to Mianyang and work at the newly established Justice Bureau!

Mianyang! That was the capital city of the region, second only to Chengdu, the capital city of Sichuan Province. I heard about this city a lot, but had never had the chance to visit it since childhood. I felt very excited.

Imidlertid, the Party didn’t arrange for my mother to go as well, as there was no “manning quota” for my mother in Mianyang.

Although my parents absolutely didn’t want to be separated again, it was a good thing to be able to return to the bigger city from the remote small town, and to do a job that suited my father’s professional training. Isn’t there an old saying in China that “people should walk towards higher places”?

Endvidere, my parents believed that if my sister and I could go to Mianyang to study, we would have a better opportunity to attend a good university in the future.

For the “bright future” of two generations, Jennifer’s family once again split into two parts. Jennifer and her eldest younger sister went to Mianyang with her father; whilst her mother and youngest sister stayed at Hanwang. (Provided by Jennifer Zeng)

On the contrary, if we stayed at such a small town as Hanwang, we wouldn’t get very far in society. In my mother’s words, the only street in town was so short that one could even cover it from the start to the end when one fell down to the ground.

Although I had always been the No. 1 student in Hanwang Elementary School in terms of exam scores, my mother never failed to remind me, “It’s just like being a general amongst a group of dwarfs.” She would also always remind me to remember that “there are higher heavens beyond this one, and there is always someone better.”

Så, in order that two generations of our family could have a better future, after just being reunited for several years, our family was once again split into two: my older sister and I went to Mianyang with my father; whilst my younger sister stayed at Hanwang with my mother.

9

The Justice Bureau in Mianyang had just been established. It had neither its own office building, nor dormitories for the staff. I stedet, both its office and dormitories for staff were rented from a hotel building. My father lived in the male dormitory; my sister lived in a dormitory for female staff, whilst I became a boarder and lived in the student dormitory of Mianyang Nanshan High School. So the three of us lived in three different places.

Nanshan High School is located halfway up on a hillside, and is somewhat isolated from the world. It was said that in the Qing Dynasty the imperial examinations were held there, so it has quite a long history.

When I returned “home” on the weekends, I squeezed into and shared the same single bed with my sister. There were many other female colleagues of my father in the same dormitory room.

Occasionally, my father would cook some food for us in his office with an electric cooker, and this would be our special treat. My sister and I could only “fight” to get our food at the school canteen, which only supplied terrible food.

Dermed, until I graduated from high school, for more than three years, my mother hadn’t managed to move to Mianyang and join us. We could only travel back and forth to visit each other during our school breaks. My mother often said, “It’s so hard to earn money, and we only end up spending it all on the road!"

10

The good news was, my father’s career seemed to have taken off. For det første, I heard that a law firm was set up underneath the Justice Bureau, then I heard that my father was transferred to the law firm and had become a lawyer. Then one day I suddenly heard that he had been ranked as one of the “Top 10 Lawyers in Sichuan Province”!

I heard that my father’s most brilliant performance was that he fought three lawyers on the other side alone. The other party he had to fight was an Honored Teacher with national recognition and was very famous. That was why he was able to hire the three very good lawyers at one go to defend himself. Imidlertid, my father defeated them all and won that case brilliantly.

These “legends” made me very proud. On the one hand, I really wanted to visit the court and watch my father’s heroic moments of debating with numerous persons at the same time. På den anden side, imidlertid, I could hardly imagine how a somewhat dull person like him, who could spend a whole day without saying a single word, could have become an outstanding lawyer, as a good lawyer was supposed to be very eloquent and good at debating.

Once I asked him, “I heard that you never lost any case. What’s your secret?"

He replied with a secretive smile, “I never take a case that I can’t win.”

When he said this, his smile was as innocent as that of a child. På samme tid, it was also as cunning as would usually be seen on faces of Chinese peasants. It didn’t make him look like a “Top 10 Lawyer” at all.

11

After I finished my second year in high school, and was about to start the third and last year, I needed to choose between liberal arts and science as my future major. I was doing equally well with both courses.

Many people said that it was better for girls to choose liberal arts as female minds could do better in those fields. If girls study science, they can’t compete with boys. Apart from knowing that I wanted to go to Peking University to study, I really didn’t know what major to choose.

My father said with much determination, “Choose science. No matter who is the chairman of the country, 1+1 always equals 2.”

After saying “1+1 always equals 2”, my father once again bit his lower lip in that unique way with an expressionless face, just as he did when my mother had burned his literary works. This once again made me feel very scared. I silently obeyed and chose science without any second thought.

12

I 1984, my dream of going to Peking University came true. My major was of course science, and geo-chemistry in particular. At the time when I needed to leave my high school forever, I found that I had accumulated many things during the past three years. My father rode a tricycle to the school to help me move my belongings. It was very hard to ride uphill, and my father was soon wet through in sweat.

Drenched in sweat, he rode and laughed, “I am a happy pedicab-man!” And mixed in his laugh, was a very undetectable trace of effort to flatter himself.

My father was a very typical Chinese peasant intellectual, who seldom expressed or showed his emotions. Nor did he ever say any sweet words such as “I love you” to his three daughters. Imidlertid, his flattering smile at that moment, when he said that he was a happy pedicab-man, has been warmly engraved in my heart ever since.

For mig, that was his way of showing his fatherly love and care.

13

When I was in the sophomore class, I received a letter from my father saying that he had joined the Party. His tone was very formal, with a little bit of excitement.

I was very surprised by this. Because of the special political environment in China, I remembered that my parents never discussed politics or state affairs at home. Nor would they ever discuss their political views with their daughters. When I chose my future major in high school, my father’s “famous” sentence that “1+1 always equals 2” was the only statement I ever heard that included a little dose of politics.

Why did my father join the Communist Party? Did he still have hope for this Party? Or was it because he wouldn’t be treated as a different species afterwards? Sadly enough, I never had a chance to discuss this with him.

This photo was taken in Yuanming Yuan (Old Summer Palace) in Beijing when Jennifer was a graduate student. (Provided by Jennifer Zeng)

14

When I was in my junior year of university, mobilized by the political instructor, I also handed in my application to join the Party. Recalling the motivations now, I found there could have been two.

One was my father’s move to join the Party. Ever since my childhood, my mother always said that I was my father’s favorite, and that he liked me most amongst his three daughters.

Accordingly, I also held my father in high esteem. I cared a lot about what he thought and chose. I thought to myself: after experiencing so many hardships, he was still willing to join the party. It must because that he still had hope for the party.

Another reason was that I was somehow convinced by this saying: even if the Party was not good enough, it could be changed for better if more good members joined it and improved it from within.

If we explore further, there could actually be a third reason. I had always been a so-called “student-of-three-excellent-qualities” since elementary school. Living in a society where everything was under control of the Party, I had always thought that one should be excellent in everything, and to join the Young Pioneers, the Youth League, and then the Party was a “natural” path that a good student and a good citizen should take.

Dermed, I became the first Party member in our class. When we graduated one year later, there were only two Party members in our class of 30 students.

15

Later on I graduated, began my career, married; and had a child. Everything went smoothly on the path that was designed and hoped for by my parents. I had not only entered the best university in China, gained a master’s degree, but also successfully entered the Development Research Center of the State Council, a workplace that many people wanted to get into but couldn’t. På samme tid, I also enjoyed love and a happy family of my own.

This photo was taken on Jennifer’s 17th birthday and was displayed at the “Education Achievement Exhibition” held in the People’s Park in the center of Mianyang City. Her hair in the photo was cut by her father. (Provided by Jennifer Zeng)

At that time my parents were so proud of me; and they had good reasons. My photo was part of the “Education Achievement Exhibition in Mianyang in Celebration of the 35th Anniversary of the Establishment of PRC [People’s Republic of China],” which was held at the People’s Park in the center of the city. It was said that every day thousands upon thousands of people visited the exhibition, and my photo caused quite a sensation.

There was an old saying in China that “Inside an embroidered pillowcase was only grass,” which means that good-looking people are usually very stupid inside and have no wisdom. So people felt it was hard to believe that a girl who was as attractive as an embroidered pillowcase could actually be admitted by Peking University.

I had already left Mianyang when the exhibition was on; and didn’t know anything about all this until letters of strangers from Mianyang suddenly flooded me. Some people expressed their admiration, and some asked me to share tips on how to do well in school. I didn’t understand why all these letters arrived until my family told me about the “Education Achievement Exhibition.”

16

juli 2, 1997 is a day that I will never forget. juli 1 of that year, China took back Hong Kong, and set that day as a public holiday to celebrate. When I went back to work on July 2, one of my colleagues put a set of books on my desk and said, “Here you are, ‘Zhuan Falun’!"

It was a package posted from Mianyang by my sister. The wrapping paper was already broken; that was why my colleague was able to see the title of the book.

I had liked to read very much since I was a child. When I was studying in university, I read books on all sorts of topics, including philosophy, religion, supernormal capabilities, qigong, the Book of Changes, etc. I studied almost everything.

On the one hand, I believed that there must be some ultimate truth in the universe for it to maintain stability and harmony, and I wanted to know what that ultimate truth was. På den anden side, I was very much puzzled about what people should do with their lives. Shall we just live for the sake of living, pursue fame, self-interest and honor, and then just wait to die?

Most of the time, I didn’t know which path to follow. I didn’t want to fight my way up by all sorts of means, like many others around me were doing. I felt that path would be too tiring, and it was totally against my nature.

Imidlertid, I also didn’t want to lag behind, be bullied or looked down upon by others as a result of not striving hard enough. I didn’t know what to follow or what to adhere to, and was bewildered most of the time. My success on the surface might have looked glorious for others. Yet, it couldn’t in the least solve the problems within my own heart.

To make things worse, I encountered a medical accident and experienced two severe hemorrhages when I gave birth to my daughter, and the blood transfusion caused me to contract hepatitis C, which is incurable. After that, life felt like an endless sinking into a bottomless pit of despair. I had to lie down in the hospital for years without being able to look after my daughter, or even being able to witness her growth.

I begyndelsen af 1997, I decided that I would not be enslaved by my diseases any more; and went back to work. I had worked for just one year when I was knocked down by my poor health. Women are usually likened to flowers, and I felt like a withered flower cast down to the ground overnight, before being able to fully blossom. I didn’t want to bury my remaining life inside a hospital, no matter how long that life would be. I wanted to “pretend” that everything was normal, and I wished to live a “normal” life.

This was, after all, just a wishful thought. I virkeligheden, my life was more tiring than that of Lin Daiyu, one of the mistresses of “Dream of the Red Chamber,” who dared not make any mistakes. Whilst Lin was afraid of being ridiculed by others in an unfamiliar environment as a helpless orphan who had to rely on her relatives, I was afraid of being humiliated by my diseases.

I was so weak that whenever I wasn’t careful enough, or whenever there was some kind of epidemic disease around, such as the flu, I would always be the first to be knocked down.

Therefore, i juli 1997, after having experienced so much, I really didn’t believe that anything would help me anymore. So I opened the book “Zhuan Falun” half-heartedly and with an absent mind.

Jennifer meditating in a park in Shenzhen City in 1998. This is the only photo of Jennifer doing Falun Gong exercises taken before the crackdown on Falun Gong. (Provided by Jennifer Zeng)

Imidlertid, when I reached page 4, where the origin of human life was revealed, I suddenly felt being strongly grasped by the content. Fra da af, I didn’t have any time to make any judgment about any remaining part of the book. I stedet, I hurriedly finished all the four books my sister posted to me in one go, which had me exclaiming again and again while reading: “Oh my god, so it is like this!!!"

I could say that the inspiration “Zhuan Falun” brought to me was much greater than that of all the other books I had read combined together. I found answers to all my questions about life, the cosmos, and even human society. I was no longer puzzled, and had gained an understanding about the purpose of my coming to this world. I immediately decided to practice Falun Gong.

I also learned that my mother and sister had been practicing Falun Gong for about one month through the introduction of a friend. They felt the practice was very wonderful and so eagerly mailed the set of books to me.

17

My mother and youngest sister were only able to move to Mianyang and joined my father and eldest sister after I had left home for university. In order to be able to move to Mianyang, my mother had to give up her nearly 30 years’ career as a teacher, as well as the so-called “merit payment based on the length of teaching,” which was not a small figure for her, as none of the schools in Mianyang City would accept her due to lack of permission to hire.

After my parents’ many years’ efforts and begging for help, the leaders of the judicial system finally agreed to help and to resolve this issue “internally.” As a result, my mother was finally given a position at the Mianyang Intermediate Court, and started off as a court clerk, the lowest-level position within the court.

I always admired my mother for her toughness. As a middle-aged woman in her forties, in order to live together with the family, she was not only brave enough to start a new career from the entrance level, but was also brave enough to become a college student like her daughter. The only difference was: while I was studying in a “normal” university, she was studying in the amateur “Open National Adult College for Court Cadres.”

My mother worked very hard. It was not that easy for her; and her memory wasn’t as good as younger people. Imidlertid, she did very well and successfully graduated several years later. This not only made up for the humiliation she had suffered for not being allowed to go college because of her “bad” “social class category”, but also enabled her to gradually be promoted from a clerk to a judge; and finally a chief judge.

Jennifer’s mother was finally allowed to join her father after Jennifer had gone to Beijing for university. This family photo was taken during Jennifer’s school vacation when she traveled back to Mianyang. The uniform worn by Jennifer’s father was actually for police officers, though he was a lawyer. At that time the legal system in China was still in the initial process of re-establishment, and lawyers were wearing police officer’s uniforms. (Provided by Jennifer Zeng)

18

I 1997, my 64-year-old father had already retired. When my mother and sister first started practicing Falun Gong, he didn’t follow along, nor did he believe in it. Imidlertid, he went to the park with them. While my mother and sister practiced the Falun Gong exercises, he went to do ballroom dancing as a form of exercise. He had become obsessed with dancing ever since he retired.

One day, after he finished dancing, my mother and sister were still doing their Falun Gong exercises. So he stood there and waited. Suddenly he saw a huge Falun (which should be invisible, in another dimension) as big as a swimming pool!

He was completely shocked. Amazed by the “seeing is believing” scene he observed, he began devoting himself to the practice of Falun Gong as well. He often shared with us what he had seen with his third eye: when he practiced the third Falun Gong exercise, he could see a cluster of small Faluns moving together with his arms. He said that he called it “a cluster” as they looked exactly the way copper coins used in old times were strung together.

When talking about this, my father looked as happy and as innocent as a child who was sharing his secrets. My sister and I agreed that father’s third eye was open because he had a side of well-preserved nature that had not been polluted. It was also the reason why he could see many supernormal things as soon as, or even before, he started practicing.

After a period of time, my father especially called and told me that his presbyopia (farsightedness) had gone!

He said that although he had officially retired, he was still invited to work for the law firm on some cases. One day, he saw many tiny pieces of paper on the table in his office while he was cleaning it, and thought to himself, “Who would have cut the newspaper into such small scraps?"

Suddenly he found that he could see clearly the tiny characters on the classified advertisements! Those characters were so small that he could absolutely not see clearly without his presbyopic glasses before. How could he suddenly see so clearly without his glasses?

He thought it was just temporary, so he dared not tell anybody.

He tested himself on the following day to see if he could still see those tiny characters clearly without the presbyopic glasses, and yes, he could!

He tested himself continuously for two weeks until he was sure that he could now get rid of the presbyopic glasses. He only called me and told me this good news after he was 100 percent sure of the fact.

Imidlertid, after he happily shared this good news with me, he added very seriously, that as a cultivator of Falun Gong, one should not develop any attachment, and shouldn’t show off or become too complacent. Therefore, he didn’t go boasting about this everywhere. Actually, he only ever revealed this in private to family members and the assistant at his practice site.

This photo taken in 1989 was the last one of Jennifer with both her parents. The hanging bridge in the background leads to Jennifer’s high school, Mianyang Nanshan High School. (Provided by Jennifer Zeng)

19

Getting rid of presbyopia was just one of the wonderful things that happened to my father after he practiced Falun Gong. For eksempel, his blood pressure had been very high for years, with the systolic pressure often higher than 200. He had been relying on hypotensor to maintain his blood pressure, but dangerous things still often happened.

Once both he and my mother went out on bicycles. While my mother was riding behind my father, she suddenly saw him fall off his bicycle and drop onto the ground. My mother was scared to death. My father had passed out while riding because his blood pressure was too high. Siden da, my mother never allowed him to ride a bicycle again.

Imidlertid, my father’s blood pressure soon returned to normal after he practiced Falun Gong, and he no longer needed any hypotensor. Many other diseases including chronic pharyngitis and nasosinusitis all disappeared as well.

In the summer of 1998, I traveled from Beijing to Sichuan with my daughter to visit my parents. I was extremely surprised when I set sight on my father who was waiting for us at the platform of the train station, as he looked at least 10 years younger!

In my memory, my father had always been skin and bones; and had never put on any weight. As a result, his wrinkles were very deep. He also started going bald as early as in his thirties, and children started calling him “grandpa” when he was less than 40 år gammel. He always mocked himself about this.

Jennifer’s father at his 60th birthday in October, 1993. The wig he wears was a gift from Jennifer. (Provided by Jennifer Zeng)

After practicing Falun Gong, he had put on at least 10 kilograms (om 22 pounds). As a result, his wrinkles became much less obvious. That’s why he looked 10 years younger when I saw him.

After staying with my parents for two days, I noticed another very important change that had happened to my father, which was the way he walked. There was a scene in Thomas Hardy’s novel “Tess of the d’Urbervilles” which impressed me very much.

The “bad guy” in the book, Alec d’Urberville, who raped Tess years ago, later became a priest. Once while he was preaching, Tess, who was among the congregation, suddenly saw and recognized him. At that time they had not seen each other for about 4 år. It was obvious that Alec didn’t recognize Tess yet, with her appearance and outfit having changed. She wanted to walk away quietly. “But the moment that she moved again he recognized her.”

From this scene we learned that the way one walks carries more of a person’s characteristics than his/her appearance and outfit. Therefore, that’s why I was so surprised when I saw the way my father walked after he practiced Falun Gong for just one year. His steps were completely different. They were no longer heavy, slow or sloppy, like an old man’s. I stedet, they became swift and as light as a swallow.

I could see that even he, himself had not realized this change. Only his family members who were very familiar with everything of his could notice this change at first sight. And this kind of change could only happen when great changes had occurred at very deep levels, levels more microscopic than the level of his body’s physical cells.

20

I also observed two photos underneath the glass on my father’s desk. One was taken before he practiced Falun Gong, in which he looked very old and as thin as a skeleton. The other one was taken after he practiced Falun Gong, in which he was meditating with very straight back, and with fair, radiant, and full cheeks.

Besides these two photos was a poem he had written. I remember the last line was, “Forever charging forward despite all the odds and hardships.” He wrote that poem to show his determination to cultivate until the very end. He said whenever there were visitors in the home, he would definitely show them the two photos as the best evidence to show Falun Dafa’s benefits.

I had never seen a happier, prouder, and more talkative father. During that summer, father had talked far more than in his entire life before.

21

Imidlertid, good times did not last long. I juli 1999, an overwhelming persecution was instigated against Falun Gong. Before I even had time to make any sense of it, I had been imprisoned several times for being a Falun Gong practitioner.

My parents-in-law, who lived with us, were almost terrified to death. After failing to convince me to give up Falun Gong, my mother-in-law thought of my parents. She believed that it was they who asked me to practice Falun Gong. Therefore, only they were able to make me give up.

So she called them and asked them to do so. Imidlertid, it was obvious that things didn’t go as she had expected. She hung up the phone and shouted in despair: “I will go to Sichuan to fight your parents to death! I don’t want to live anyway!"

I was very scared, fearing that she would really go to Sichuan to make a scene at my parents. På den anden side, I couldn’t help thinking bitterly, ” If you really don’t want to live any more, why don’t you go fight with Jiang Zemin instead!" (Jiang Zemin was the head of the Chinese Communist Party who launched the campaign against Falun Gong in July 1999).

My mother-in-law was a women cadre before she retired. During the Cultural Revolution, she had been dragged onto a stage to be publicly denounced, with her arms twisted backwards and up into the air. This particular gesture had a nickname, “going by air”, which could still be seen in many pictures taken during that period of time.

After being targeted and tortured like this, she had to take the entire family to the countryside to avoid being “struggled against” again. This experience had somehow turned into a deep fear and a sense of compliance towards the CCP.

Like many other Chinese people who had been living in fear and obedience for too long, she couldn’t understand why I didn’t become as fearful as her. Nor could she forgive me for not willingly accepting the reasoning that “the arm is no match for the thigh” and therefore submitting myself to the CCP’s authority.

22

In the autumn of 1999, I heard from other Falun Gong practitioners that several former members of the Falun Dafa Research Society would be put on trial soon. One of the “crimes” they were accused of was that they had incited 10 thousand people to go to Zhongnanhai to appeal for Falun Gong on April 25, 1999. As I happened to be one of the 10 thousand people on the day, I planned to go to the court to testify that I went there of my own accord, not incited by anyone else.

After learning my thoughts, my father told me that my plan wouldn’t work at all. As one of the lawyers in the city, he had been notified the following policies regarding Falun Gong practitioners’ cases:

Falun Gong practitioners are different from ordinary criminal offenders. Therefore, while ordinary offenders can be bailed out by their lawyers; Falun Gong practitioners cannot.

The overall direction of Falun Gong practitioners is already wrong. Therefore, when defending Falun Gong practitioners in court, lawyers should not fight as hard with the prosecutors regarding the “trivial” issues such as whether the evidence is adequate, or whether the facts are solid enough, as they do in other cases.

The attorney’s defense must be approved by the authorities beforehand. While arguing for Falun Gong practitioners, the attorney can only read from the approved defense without saying anything else.

I didn’t feel surprised by this. alligevel, dec. 26, 1999, I still went to the Beijing No. 1 Intermediate People’s Court, hoping to attend the trial. Imidlertid, the street was filled with police, og, like another one thousand other Falun Gong practitioners, I was arrested before I could even get a glimpse of the court.

Before being sent to the detention center, I asked the police officer at the local police station, “How long do you think we are going to be detained this time?"

He replied, “I don’t know. We’ll need to wait for the instructions from higher authorities.”

“Waiting for instructions from higher authorities” was indeed the real essence of the CCP’s “rule of law.” When I was in jail, some fellow inmates once asked, “Your father is one of the top 10 lawyers of Sichuan Province. Why don’t you ask him to defend you?"

As a matter of fact, not only was my father one of the top 10 lawyers in Sichuan, my mother had also become a chief judge at the intermediate court in Mianyang City by then, with my sister being the director of the Policy Research Department of Mianyang Fucheng People’s Court.

But none of these would be of any help. Not only that, but my sister herself was also dismissed from the Party and her workplace, after she went to Beijing to appeal for Falun Gong after the crackdown.

Endvidere, she was also on the national wanted list of the Public Security Ministry. My parents were virtually under house arrest. They were not only often summoned to their workplaces to be “educated,” but were also under 24-hour surveillance by CCP informers living just downstairs. All their movements were closely observed and then reported to the authorities.

Jennifer with her mother in early 1999. This was the last photo taken before the persecution of Falun Gong began. Jennifer never expected that the persecution would occur. Nor did she realize that she would never have another chance to take a photo with her father. (Provided by Jennifer Zeng)

23

I april 2000, I was arrested for the fourth time; and then sent to the Beijing Female Labor Camp with a one-year Re-education through Forced Labor sentence. None of the following was able to prevent this from happening: my father’s “top 10 ” status, his “1+1=2″ theory, my brilliant halo as a ” talented woman from Peking University,” as well as the fact that I once worked for the Development Research Center of the State Council.

When my father asked me to study science, he believed that studying science would help to prevent me from recommitting the same error he had made. Imidlertid, he didn’t expect that “plans always fall behind changes,” and that I would end up in jail for practicing meditation and trying to be a better person—not for doing anything political at all.

Every day within the labor camp was a battle between life and death. Every day I was either experiencing for myself or witnessing all kinds of the most unimaginable, inhuman, and vicious crimes. Amidst the unprecedented barbarous physical torture, mental destruction, and a war to destroy our will power, I had been pushed to the edge of total collapse countless times.

Imidlertid, with a very strong determination to survive so that I could expose all this evil, I did manage to escape the devil’s den by a hair’s breath (Please refer to my autobiography “Witnessing History: One Woman’s Fight for Freedom and Falun Gong” for more details) and was released in April 2001. In order not to be sent to the brainwashing center again, I had only five days later to leave my home and live in exile.

At this stage I learnt that my sister, who was on the national wanted list, was “hiding” and working in a small bar in Chengdu, the capital city of Sichuan Province some 100 kilometers away from Mianyang. As she couldn’t apply for a temporary residence permit with her ID card, she was nearly caught several times when the police went to the bar to check residence permits. It was very dangerous for her to continue to stay there. I decided to find her a safe place so that she could leave as soon as possible.

I took the train to Chengdu to meet her. The bar she worked at was extremely small, with her as the only attendant. So she had to do everything alone, from serving the customers to acting as the cashier. Everyday she worked until midnight. As she had no other place to stay, she had to wait until all the customers left before she could push the tables and chairs to the corner to make a bed on the floor for her to sleep.

Under such circumstances, it was impossible for me to stay with her at the bar as well. So we went to a small motel nearby. At this stage, we hadn’t seen each other for more than a year; and there was so much we wanted to share with each other.

We talked for the entire night until dawn. When daylight broke, we both felt very hungry. So we walked out to get some food. At the front door of the motel, we came across a young man. His facial expression abruptly changed as soon as he set sight on my sister. Then he quickly turned back and rushed away.

My sister also recognized him: he was a classmate of my sister from ten years ago, when they were studying at the police academy. And he was currently a police officer in Chengdu city, and obviously knew very well that my sister was on the wanted list with 30K yuan (approximately US$3,600, a sum greater than the average annual income in China at that time) reward money on her head.

We immediately checked out and left the area. Having nowhere to go, my sister had to return to her bar although we both knew it was very risky. In the meantime, I decided to secretly travel back to Mianyan. I could visit my parents, after having been imprisoned for more than one year, and I could also try to find a place for my sister to go from there. I believed that I could only seek help from a fellow Falun Gong practitioner, as I didn’t think there would be any other people who would take the risk to offer assistance to a “wanted criminal.”

24

When I saw my parents after only one year’s separation, I was as surprised as I had been in 1998, when I saw the huge change in my father after he practiced Falun Gong. Imidlertid, this time, the surprise was totally opposite of the one before. It deeply pained my heart.

My father had relapsed into a thin, bony, and silent old man. What was more terrifying than the change with his appearance was that, through his gloomy face, I could see that his soul seemed to have withered, without any sign of life. He was no longer the father I saw over a year ago, when his face had glowed with a youthful radiance while proudly boasting that “four out of five members of our family all practice Falun Gong!"

He was obviously too scared by the overwhelming propaganda campaign and the suppression and had stopped practicing Falun Gong. He no longer talked about anything related to cultivation, enten. He even failed to ask me anything about what had happened to me, how I had suffered in the detention center and the labor camp. Perhaps it was because he dared not ask, or perhaps he was not interested. For an old man whose soul had dried up, it wouldn’t make any difference anyway.

I only heard him mumble once, “I am almost 70, and can’t afford any mishaps. What if they confiscate my house? What if they stop paying my retirement pension?"

As to my mother, I noticed that much of her hair had turned grey. I første omgang, she always talked about her three beautiful and talented daughters with much pride and excitement. Imidlertid, now with two of her three daughters having become the enemy of the Party, all her pride and happiness had gone. She also looked like a lifeless plant wilted by the frost.

25

Because of the special circumstances surrounding my sister and me, it was very difficult for us to communicate with each other. I dared not use my parents’ home phone or my cell phone to call her directly, as that could bring immediate danger to her. I had to call her beeper number using a public phone, and then wait there for her to return my call.

After receiving my beeper message, my sister needed to try to find an opportunity to leave the bar first, and then find a public phone to call me back. She had to be very careful, so each time she called, she tried to use a different location.

After overcoming all sorts of difficulties and challenges, I finally found a place to go. I asked my sister to buy two train tickets from Chengdu, one for herself and one for me. As the train started from Chengdu, it was easier to buy a sitting ticket from there. When the train stopped as Mianyan, I would board from there and join her.

I did exactly as we agreed. Imidlertid, when the train arrived and stopped at Mianyan, my sister didn’t come down with my ticket as I had expected.

I felt something very ominous, but still managed to get on board with my platform ticket. I went straight to where our seats should have been and found two peasant workers sitting there. I asked them whether they had seen a young woman with such and such an appearance when they first boarded the train.

They immediately cut me short in a panic and said, “No, we didn’t! We have been here from the very beginning!” I knew that they were worrying that I would say that those two seats were not theirs and drive them away.

Failing to find out any clue, I had to push my way to and fro within the very crowded train, trying to see if I could find any trace of my sister while knowing too well that the possibility was miniscule. After about one hour, the train arrived at the next stop, which was more than 50 kilometers (om 31 miles) away. I had searched from the first to the last car of the long train a couple of times, but still didn’t see any trace of my sister.

Not knowing what to do, I got off the train. It was about 3:00 am in the morning; with heavy rain pouring down. Everything was so dark, and so strange. Standing in the pouring rain, my heart kept sinking and sinking.

Finally I decided to call a taxi and go back to Mianyang. How could I leave alone without knowing exactly what had happened to my sister?

As soon as I entered my parents’ home, I saw a lot of luggage scattered everywhere on the floor. My mother was trying to sort them out; with her hair in a mess.

Upon seeing me, she didn’t ask why I ended up returning. I stedet, she said to me with a dull and blank face, “Your sister was arrested yesterday. This is her luggage; your brother-in-law just got it back from the detention center. And this is the receipt of the confiscated items that were found with her when she was caught.”

I took the receipt and looked at it with a blank mind. It says, ” A number of copies of Falun Gong books; two train tickets to Taiyuan; and a storage room ticket for luggage…”

My father suddenly grabbed my bag from the ground, rammed it into my hand, pushed me out of door; and shouted loudly, “Hurry! Go! Don’t wait until the police find out who was planning to run off together with your sister!"

I was dumfounded for a while. Then I clenched my teeth, took a last look at my mother’s newly dull eyes and grey hair, then turned around abruptly and quickly walked away.

26

Later on I learned from my mother that it was indeed that police classmate of my sister who had reported upon her, so that he could gain the 30K yuan reward.

After he alerted the authorities, police officers from Chengdu and Mianyang worked together and launched a blanket search for my sister, while I was trying to find a place for her to go. On the day when we had planned to leave, my sister left the bar in early morning; and stored her luggage in the train station, as the train wouldn’t leave until late at night.

She decided to utilize her spare time to visit several classmates in Chengdu, whom she dared not meet before. She wanted to say farewell and tell them about Falun Gong and why it was being persecuted. Men, alas, she ended up being caught on the bus, before she ever saw any of her classmates.

All this was reported in great detail by the “Rule of Law” newspaper in Mianyang. Local police celebrated my sister’s arrest as a big achievement, since she was on the national wanted list. So they boasted about themselves in every detail in the newspaper.

I couldn’t imagine how many police officers they had deployed in order to catch my sister in a big city with a population of more than 10 million. How did they manage to locate her while she was just randomly on a bus without any previous plan? As far as I am know, she didn’t have a cell phone with her either, which might have been used to trace her. I could never figure this out.

27

Several days later, I arrived in Taiyuan alone. The friend who waited for me there still took me to Mountain Wutai, a famous Buddhist site, according to our initial plan.

Standing on top of the mountain, thinking about my sister who should have been there together with me, looking at the sacred Buddhist site being turned into a chaotic tourists’ destiny, and listening to thesutraschanting played with cassette recorders in the shop that sold travelsouvenirs, I was suddenly overwhelmed by a tremendous feeling of sadness and sorrow. I couldn’t help but cry. Deep within my heart, I suddenly felt connected with a poet of more than a thousand years ago, who wrote this famous piece:

Before me, where have all the Sages of yore gone? Behind me, where are their successors (– Tell me, m’friend)?O Heaven and Earth, how boundless and without end!I’m all alone, down my cheeks tears keep rolling on.

Ja, the irony and sadness was, while ancient and sacred Buddhist temples and sutras could be traded for money a million times, genuine cultivators of Buddha principles were not even allowed to exist in the vast space between heaven and earth.

Imidlertid, while I was feeling extremely concerned for my sister, I had never realized that the moment when my father pushed me out of the door would be the last time that I would ever set my eyes upon him.

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Four months later, I was lucky enough to be able to escape to Australia, and formally begin another stage of my life in exile. With the help of local Falun Gong practitioners, I settled down quickly and continued to write my autobiography, “Witnessing Histroy: One Woman’s Fight for Freedom and Falun Gong,"to expose the atrocious CCP’s persecution of Falun Gong.

The book was translated into English by the biggest publisher in Australia, distributed worldwide, and raised a lot of attention internationally as the first book written by a labor camp survivor since the crackdown of Falun Gong began.

Several years later, Ny Tang-dynastiet Television, the largest independent global Chinese-language television network, co-produced a documentary called “Free China: the Courage to Believe” with me as one of the main characters. This film won numerous international awards after its release, and I was invited to many cities and countries to give speeches. Because of all this, I received a lot of media coverage. As a result, my parents in Mianyang also received “extra attention” from the National Security Bureau.

In the beginning, the national security police only “invited” my parents to tea regularly. Later on they gave them more pressure by asking them to go abroad to convince me into returning to China to “take a look and see how great the motherland has turned out to be.”

I am aware that when a Falun Gong practitioner returns, they will force him or her into revealing as much information as possible about overseas Falun Gong practitioners. Ultimately, the returned practitioner becomes a spy for them thereafter.

Enkelt gang, before the Middle-Autumn Festival, a time when Chinese families traditionally come together, the director of the National Security Bureau in Mianyang even personally sought my mother for a discussion.

He said to her, that they sincerely invited me back to China and would ensure my safety. He even said that he could write a guarantee statement and give it to my mother. They were actually still forcing her to contact me to pass on their “invitation.”

The police writing a guarantee statement to me? I didn’t know whether I should laugh or cry. When I was detained in the labor camp, they nearly tortured us to death in order to force us to give up our beliefs by writing a guarantee statement that we would not practice Falun Gong.

Now they want to write a guarantee to me? If they were really willing to “guarantee” my safety, why don’t they just release all the countless imprisoned Falun Gong practitioners in China? Why are they still committing the inhuman crime of killing Falun Gong practitioners on demand for their organs? Even the Nazi regime has never done such a thing as forcefully mass harvesting human organs to be used as merchandise for profit. This brutality has gone far beyond any normal human’s imagination.

The police writing a guarantee statement for me? No way. I asked my mother to tell them, “Sorry, but I don’t think I will go back.”

When the police heard this, they forgot to put on their disguise; and viciously threatened my mother, “If she refuses to come back this time, never dream about coming back again!"

Most of the time, it was my mother who warded off the police harassment. I learnt from my mother that father always had only one sentence for the police when they asked me to go back to China: “The time is not right yet.”

Every time when I called home, it was always my mother who answered the phone; whilst my father seldom talked with me. When he did talk, he always simply said that he was fine, and asked me not to worry about him.

Imidlertid, I learned from my mother that he was not doing too well. His blood pressure went up again, he had cataracts in his eyes and his eyesight had turned very bad. Sometimes, when he tried to fill his cup, he poured the water outside of the cup as he couldn’t see clearly.

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I august 2014, after being separated from my father for more than 13 år, I suddenly heard that he was in a very critical condition and had been sent to the hospital with heart and respiratory failure.

While the entire family was feeling extremely worried and helpless, police officers lost no time to appear at the hospital, and said to my mother in a tone as if they had just won a big war, “Need your eldest daughter to come back? Godt, we can still offer help.”

Offering help? Several years ago, when I went to the Chinese Consulate in Sydney for some attestation service, instead of offering me the service, the officer gave a pile of documents and asked me to write down details including all my Falun Gong activities in Australia, as well as all the information I knew about other Falun Gong practitioners. After I did what they wanted, they would then stamp the documents for me.

Faced with this kind of scampish blackmail, what could I do except walk away? So if I really asked for “help” this time, wouldn’t they give me a thicker pile of paper sheets?

30

On Oct. 27, 2014, my father passed away after living in misery for many years. When he departed from this world, none of his three daughters were able to be around him.

I wept silently in a far away and foreign land. When my father’s situation deteriorated rapidly, I once wanted very much to rush to the Chinese Consulate to see if I could get a visa to return to China. Imidlertid, my supervisor stopped me and said that he didn’t think my father would want to see me return and put myself in danger.

And the police didn’t even spare my parents when my father was dying, as they thought that would be the best opportunity to force me back. Being pushed by them into a corner, my mother clenched her teeth and said: “Don’t push us. We don’t need her to come back. After her father dies, I will just incinerate the body and then sprinkle the ashes into the river! If she has filial piety, she can try to remember her father in her heart; if she has no filial piety, that is also fine! We don’t need her back!"

Mother’s “ruthless” words really hurt my heart. But what could I say? Under the ruthless CCP regime, if my mother were not tough enough, how could she survive all the atrocities that could have killed her many times over otherwise?

31

After more than one month, I still couldn’t get over my grief and regret. I was extremely upset that I couldn’t be at his side when he was dying. I was even more upset that I had not tried hard enough to persuade him to take up Falun Gong again, as I knew that the home phone was tapped.

I was afraid that if I did, I would bring more trouble to him. As it happened, on the night before he passed away, I had been still planning that I would overcome my fear the next day and ask him to take up Falun Gong again for his health.

Imidlertid, early the next morning, the first thing I learned about was his death. If he had resumed his practice of Falun Gong, I’m sure he wouldn’t have passed away like this! I didn’t know how I could make up for all the losses.

Finally I thought about something, som var, to publish a declaration on his behalf to quit from the CCP at The Epoch Times Quit the CCP website. Although he had told me before that he had already withdrawn from the party, I was not sure how he did it. Therefore, I thought it was necessary for me to publish a declaration on his behalf.

I sincerely believe that people’s souls live beyond their physical bodies, and they will go to other dimensions. Therefore, it was necessary to help my father to clear the “mark of beast” left on him by the CCP, as he was once a CCP member.

This was also perhaps the only thing I could do for him at this stage. It really pained my heart to think that my dear father, who was once so talented, so upright, and so kind-hearted, died in such miserable circumstances. He was even denied the chance to see his daughters on his deathbed. Wasn’t all of this caused by the CCP? I was very confident that my father’s soul would want me to declare his wish to cut any lasting ties with the party.

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den nov. 29, 2014, I published the following declaration on behalf of my father at the Quit the CCP site on The Epoch Times website.As I was still very upset because of my father’s death, I could only write a very simple, and therefore not satisfactory declaration:

Quit the CCP Declaration for My Late Father Jiang Shengzhi

My late father Jiang Shengzhi once practiced Falun Gong; but was forced to give up because of the CCP’s persecution. He died of illnesses recently after suffering miserably for many years. The practice of Falun Gong once benefited my father greatly, and he looked at least 10 years younger because of it. It is impossible to know how many people like my father have been killed either directly or indirectly by the CCP’s persecution of Falun Gong!

Although my father had chosen to withdraw from the CCP before, he had not published his declaration at the Epoch Times website. Hence, I hereby solemnly declare on his behalf that he would like to quit the CCP and its related organizations, and I do believe that his soul in heaven would like to see me doing this for him.

Jiang Shengzhi’s eldest daughter Zeng Zheng

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I had always wanted to write something to commemorate my father; but always hesitated, as I didn’t know where to start.

I april 2015, the number of people who have published their declarations to withdraw from the CCP and its related organizations exceeded 200 million. To celebrate this occasion, The Epoch Times launched a composition competition and called for article submissions. I thought to myself, let me commemorate my father via participating in this competition. Apart from this, I couldn’t think of any better way.

Therefore I wrote this long article in tears.

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As for myself, I published the quit CCP declaration below on Dec. 15, 2004, about one month after the publication of “Nine Commentaries on the Chinese Communist Party.”

Quit the CCP and Become a Clear-Minded Chinese

When the CCP started the crackdown on Falun Gong, it announced that “no Communist Party members are allowed to practice Falun Dafa.” At that stage I chose to continue to practice Falun Gong without any hesitation. As a result, I was illegally imprisoned for more than one year. I had thought that as I had not paid any party dues and had not involved myself in any party activities for such a long time, I should have been considered as having automatically withdrawn from the party according to the CCP’s regulations. Therefore, I had always thought that I already had nothing to do with the CCP whatsoever.

Imidlertid, after reading the “Nine Commentaries on Chinese Communist Party” recently, I was struck by so many new realizations that I felt I needed to ponder how I was “trapped” into the CCP in order to really clear away the poisonous damage it left on me. At the historical moment of “disintegrating the CCP with universal laws,” I needed to make a clear stance.

The earliest thing I remember in my life was when I was four years old. At that time, I had started trying to imitate the dancers after watchingthe revolutionary ballet “White-haired Girl,” one of the eight “model revolutionary ballets” during the Great Cultural Revolution, and my mother was very proud of my dancing talents.

Not until more than 30 år senere, after I had arrived overseas, did I learn that the story portrayed in the“White-haired Girl”, a story about how the CCP saved this white haired girl from the “old evil society,” was a complete lie. Not only was it a lie, but it was also related to the so-called “Land Reform” campaign, in which more than 100,000 landlords were killed, with their lands taken away by the CCP. In order to glorify this “Crashing the Landlords and Sharing their Land” campaign, the CCP fabricated that story to make it look great.

I was very much astonished when I learned the truth: to realize that the first memory in my life was actually related to the huge lie and ruthless campaign that had killed more than 100,000 people.

I don’t remember exactly when I joined the Young Pioneers of China (once also called the “Little RedGuards”). According to my mother, it was when I was in the first grade of elementary school. As I did very well with my studies and was very obedient, I was among the first group who joined the “Little Red Guards.” For many years, I had been very proud of this, as I thought it meant that I was doing very well in school, and it should be regarded as an honor.

I only felt alarmed after reading the“Nine Commentaries on the Chinese Communist Party.” As a six year old child, who wasn’t even able to remember everything, I was already dragged into the evil CCP’s system, as the"Little RedGuards” was officially entitled the “reserve team” of the CCP. I didn’t know how many times I had sung theLittle RedGuards theme song “We are the Shining Future of Communism.” The Communist Party has established communism as its state religion, and everybody was forced into it ever since he or she was born.

The “Great Cultural Revolution” began in the year I was born, and lasted for 10 år. Therefore, throughout my childhood, what I was exposed to were all the CCP’s propaganda about how “Chairman Mao” was the great savior of Chinese people, and how “great, glorious and correct” the CCP was. Literature works, musik, dance, fine arts (if those “revolutionary propaganda pictures” could be called “fine arts”), films, and so on, were all tools to propagandize that “The Great Cultural Revolution is absolutely great!"

Dragged inside the Party’s cultural surroundings, I unknowingly received many things that the Party wanted to instill in me, though I was a kind-hearted and simple person by nature.

I joined the Youth League in middle school. On the surface, it seemed that this time I joined it with full awareness. Imidlertid, when the entire society was tightly controlled by the CCP, when every student was made to believe that joining the Youth League was a glorious thing, and it indicated you were doing very well, could one make any better judgment?

I was admitted to Peking University in 1984, and experienced a rare and relatively open and relaxed period when different kinds of theories and philosophies were allowed to spread. Many people did manage to rethink and reflect on the “Great Cultural Revolution.” However, under the Party’s persuasion, like many other Chinese people, I also believed that since the Party had “corrected” its own mistakes, everything would be brought back on to the right track, and tragedies like the Great Cultural Revolution would never happen again.

I became the first CCP member in my junior year in the university. I think the following two reasons played an important role in this: 1. I was somehow convinced by the theory that the Party could be changed for better if more good people joined it; 2. My father was finally admitted into the Party the year before after his constant efforts for more than 20 years of trying to be accepted.

When I learned he joined the Party, I was greatly shocked. I thought, as someone who had experienced so much, including political discrimination and persecution, he still didn’t give up his efforts. He must have had a very good reason for doing so. Therefore, I should follow suit.

Now when I look back, I suddenly realized how unfounded this reason was. How could I be convinced by such a reason back then?I actually knew very little about father’s experiences, except the fact that he was labeled as the “black pawn of reactionary capitalist-roaders,” relocated to a remote small town, and re-educated there for many years.

My sister was born when I was four years old. As my mother, who was not allowed to live together with my father, couldn’t look after two children at the same time as she still needed to work to make a living, I was sent to live together with my father.

Imidlertid, until I left my hometown for university, in more than one decade’s time of living together with my father, I never heard him talk about any of his experiences during the Cultural Revolution, nor did he ever make any comments about any state affairs, despite the fact that he graduated from the department of politics of Southwest Politics and Law University.

The first political comment I ever heard him make was this, “No matter who is the chairman of the country, 1+1 will forever equal 2.” On the other hand, liberal arts are too easily affected by politics. Therefore, although many people said that girls should study liberal arts, I still chose science because of my father’s insistence.

I learned a little of my father’s misfortune during the Cultural Revolution only recently through my mother. I 1967, he was hospitalized after developing acute hepatitis, but was still dragged out to be publicly denounced. His hands were painted with black ink to indicate his identity as the “black pawn of reactionary capitalist-roaders.” Large amounts of his hair were pulled out. As a result, he became bald-headed as early as in his thirties.

Imens, my mother had to look after my father, who was nearly tortured to death, while I was only one-year-old. She also had to put up my father’s written “self-criticism” everywhere according to the requirement of the “rebels,” with no single spot to be ignored, or any copy being put in the wrong place.

I couldn’t imagine my father’s feelings after suffering all of this. In my memory, my father seldom talked. Imidlertid, when he wrote to me to tell me the news about having joined the Party, for the first time ever, I sensed his excitement. And this in turn influenced me deeply.

As my father’s family background category was “small land lessor,” he fell into the politically wrong class ever since he was born. Because of his “wrong” family class, no matter how hard working and how talented he was, he had always been struggling at the bottom of society. Perhaps being admitted into the Party could help rid himself of this inferiority complex of being politically wrong? Or did it have other meanings for him? Maybe he would never discuss this with me, as talking about politics was not safe in China, even within one’s family.

Many people don’t realize that the fear and loathing they have toward politics are in fact the terror and hatred they have toward the CCP’s history of killing. Part 3 of the “Nine Commentaries on the Chinese Communist Party,” “On the Tyranny of the Chinese Communist Party,” enables one to see more clearly and comprehensively that the CCP’s politics has been about how to kill and crackdown on people.

I democratic countries, voting is a citizen’s obligation; and that is also “getting involved in politics”. What is there to fear or loathe? It is the CCP that has imposed a connotation of suppression and killing on the term “politics,” and that is why so many Chinese people hate the mere mention of “politics.”

One year after I became a formal Party member, the Tiananmen Square massacre happened. I was extremely shocked. As many students from Peking University were very active in the movement, it was said that the Peking University would be a main target for further crackdowns. Many different and horrible rumors were passed around, such as the army would occupy the campus, and no student should sleep on the upper level of a bunk bed to avoid being hit bystray bullets, and so on. The authorities of the university strongly suggested that we don’t stay on campus.

I was very much terrified, as I couldn’t find a place to stay. In the end, I ended up sleeping on a very hard desk in the office of a friend. During the night, I opened the office door to find my way to the restroom. Suddenly I thought I heard terribly loud bursts of machine-gun shots, and was nearly frightened to death.

Imidlertid, when I tried to find out where those gunshots came from, I realized that it was just the croaking of many frogs, as my friend’s office was located in the suburbs, and very close to a pond.

It took me several days and a lot of effort to be able to buy a train ticket so that I could escape Beijing-the city of the massacre, which was already under martial law. When arriving at the Beijing train station with three friends, I found it was as chaotic as if it were the end of the world. Many trains were cancelled or delayed. Dark smoke was still rising from the burnt tanks and military trucks.

We sat underneath a bridge near the train station; anxiously waiting for information regarding the departure of our train. As we had nothing better to do, we drew a portrait of Li Peng, whom we believed had ordered the army to kill the students, and then threw small pieces of stone at the portrait to see who could hit it with more precision.

After all the “noise” was suppressed, all the student party members were required to write up “thought reports” at great length with all the details about ones’ thoughts and deeds during the student movements. When trying very hard to keep myself out of trouble, I never seriously reflected on what kind of role the CCP had played in this tragedy. As a female science student, I was never very much into politics. Like many other people, I “forgot” this massacre soon enough: when all is said and done, nobody in my family was killed anyway.

Many people had tried to change the Party through joining it. Imidlertid, a ruthless reality smashed all their dreams. Disappointed by the failure, many people had long since given up this kind of thought and effort. Almost everyone agrees that the CCP isn’t good, but people usually feel helpless as it still seems so “strong.”

Only after I finished reading the “Nine Commentaries on the Chinese Communist Party” did I understand the reasons: As stated in the “Nine Commentaries,” the CCP is a somewhat “abstract,” independent, foreign, and evil specter that attaches itself to people, who could only be controlled and manipulated by it. How could one change it by joining the party?

That also explains the reason why after ten general secretaries of the CCP were all “knocked down” by the Party, the Party itself still “thrives in prosperity.”

That is also the reason why within the CCP’s doctrine, the Party’s interest is always above everything. Any human being, including all the party members can only be its tools, without being able to change any part of it. Any attempts to change it, or illusions that it can be changed, will surely be proved to be a failure, and what accompany all the illusions will surely be tragedies for the Chinese people, and even the world.

I am very grateful for the Epoch Times’s “Nine Commentaries on the Chinese Communist Party.” It enabled me to reflect on my initial motivation to join the CCP, helped me see through the Party for what it is, and therefore to clear away more thoroughly its poisonous elements within me.

The best way to rid oneself of a foreign evil specter is to firmly deny its existence, and to proactively break away from its control and influence in mind as well as in its organizational forms.

The Chinese nation has been occupied and possessed by the CCP evil specter for too long and is therefore critically “ill.” For an ill person, or for somebody who is controlled by a foreign specter, nobody would ask, “What will this person do without his illness or specter?"

Therefore, it is completely unnecessary to worry about who can lead China without the CCP. A China without the CCP will surely regain itsvitality, justlike a sick person who was suddenly cured.

Hence, I hereby solemnly declare my withdrawals from the CCP, the Youth League and the Young Pioneers, and that my applications to join the CCP, the Youth League and the Young Pioneers, all the thought reports I wrote after joining the CCP, as well as all the written materials in my profile held by the CCP, are null and void. Only bywithdrawing from the CCP can I become a really clear-minded Chinese citizen.

***

Jennifer Zeng is the author of “Witnessing History: One Chinese Woman’s Fight for Freedom and Falun Gong.” Before she was persecuted in China for her faith, she was a researcher and consultant in the Development Research Center of the State Council, the State Cabinet. Her story is featured in the award-winning documentary “Free China; the Courage to Believe,” co-produced by New Tang Dynasty Television and World2Be Productions. Zeng has ablogand posts toFacebook.

NEW YORK—Like millions of young men and women in rural China, Yi Yeting journeyed to the coastal cities for better job prospects. In Shenzhen, a southeastern metropolis bordering Hong Kong, Yi found employment with a large state-owned manufacturing company.

Two years into his job, doctors told Yi, then only 24, that he had leukemia, the result of extended exposure to benzene, a sweet-smelling toxic chemical that is strictly regulated in the United States and other developed countries. I Kina, Yi had to breathe it in every day.

Yi and other Chinese victims of global supply chains for products ranging from cargo containers to Apple’s iPhones are the focus of “Complicit,” a new documentary by directors Heather White and Lynn Zhang. Besides featuring testimonies from dozens of victims as well as Chinese and overseas media reports, the film also used footage shot by undercover activists.

“Complicit” premiered in the United States to a packed theater in Lincoln Center on June 12. The film’s opening scene, the haunting funeral of a young factory worker, reminded some in the audience that they too played a part in the tragedy being highlighted.

The funeral procession of a young factory worker, Yi Long. (Courtesy of Human Rights Watch)

“I felt guilty after watching the film, having a phone in my bag,” said Jhoe Garay, who attended the premiere. “I didn’t know anything about the people dying because of phones or iPads.”

As the film highlights, 90 percent of the world’s consumer electronics are produced in China. Many of the factories like Foxconn, the world’s largest contract electronics manufacturer and Apple supplier, employ migrant workers who leave their hometowns in search for higher-paying work. Official statistics counted over 280 million migrant workers in 2016, many of whom were teenagers.

Hungry for more profits, Chinese contractors to global brands force workers to use toxic chemical solvents like benzene and n-hexane because they are cheaper or more efficient than their safer alternatives.

This unethical manufacturing practice has led to many tragic stories, some of which are documented in “Complicit.”

I 2009, Ming Kunpeng contracted leukemia after two years of wiping electronic component parts with benzene in a factory then owned by the Dutch company ASM International. A spokesman for ASM denied that Ming was exposed to benzene, but the company did eventually offer a one-time settlement to Ming’s family after their protracted lobbying.

Ming’s health deteriorated, and not wanting to burden his family with high medical costs, he committed suicide by jumping from the roof of the hospital where he was receiving treatment. He was 27.

Tragedy sometimes brings out true inspiration, as the film shows with the case of Yi Yeting, the migrant worker in Shenzhen.

Despite battling leukemia and mounting health expenses since 2005, Yi has found time to volunteer with a Hong Kong-based NGO to help dozens of victims of occupational diseases or work-related injuries demand compensation and workplace reform from companies like Foxconn.

“I still get tears when I watch the film because I feel connected to those individuals,” said director Heather White in an interview. White, who formerly headed a watchdog NGO, has spent her entire career in China investigating labor violations in factories.

Making this film was “an incredible, personal journey” she said.

The screening was followed by a panel discussion with White and Todd Larsen, the Executive Co-Director of Green America, which promotes environmentally sustainable consumer and corporate practices.

The panel noted that while electronics manufacturers across the globe violate workplace practices, entrenched government malfeasance and corporate abuses have exacerbated the situation in China. There, the authorities accept bribes from factories to suppress activists and squash NGOs instead of cracking down on malpractice.

Because of his activism, Yi Yeting was put under surveillance, evicted from his apartment, and blocked from exiting the country. Although he managed to attend the recent European premiere of “Complicit” in Geneva, he was questioned for hours by the Chinese authorities about his whereabouts upon his return.

Yi can be considered fortunate. A worker who was supposed to be featured in the documentary disappeared on his way to work. Previously, he had been organizing other workers in a neighborhood near a Foxconn factory where a cluster of leukemia victims was discovered.

“We just never heard from him again,” Heather White said during the panel discussion. “His family never found him.”

“China is a more extreme case because of its repressive authoritarian government and the inability of workers to have a voice at all,” she added.

White called on consumers to pressure the large global brands by signing petitions, writing letters, or dialing company hotlines to show concern about worker protection. Companies like Apple and Samsung are “able directly to influence the quality of the working conditions, at least in their own factories," hun sagde.

“I feel like we consumers in the land of plenty are fundamentally connected to those people who make our goods,” said audience member Jody R. Weiss after the film premiere.

Beijing and Hong Kong have approved a new cross-border bond trading program, called bond connect, hoping to attract a new wave of foreign investors to buy Chinese onshore bonds.

The platform is similar in theory but differs in execution to the existing stock connect between Hong Kong and the mainland, which allows foreign investors to purchase mainland stocks. The bond connect will link Hong Kong to Shenzhen’s bond markets and is expected to go live on July 1, the 20th anniversary of Hong Kong’s handover to China.

Beijing hopes the bond connect will legitimize its bond market on the global stage and help diversify bearers of onshore default risk. But immediate success is unlikely, given the existing lukewarm reception of the similar stock connect program and overall investor skepticism of Chinese credit.

Expanding Access

China is the world’s third largest bond market following the United States and Japan, but is largely closed off from foreign investors. It first opened the onshore bond market to foreign investors in February 2016. Under this arrangement, foreign asset managers wishing to purchase such bonds must register locally in mainland China.

The bond connect will officially eliminate that requirement, as firms in Hong Kong will have the ability to purchase onshore bonds at will, without a mainland license.

In ajoint statement Kan 16, the People’s Bank of China (PBoC) and Hong Kong Monetary Authority (HKMA) said that “Northbound trading will commence first in the initial phase, dvs.. overseas investors from Hong Kong and other countries and areas (overseas investors) to invest in the China Interbank Bond Market.” The opposite southbound trading, or mainland investors investing in Hong Kong bonds, will commence in the second phase at a later date.

I teorien, bond connect will no doubt expand the market for Chinese onshore bonds and bring in a new wave of investors. “The major advantages of the Bond Connect compared to the existing China Interbank Bond Market scheme are the speed of gaining the access and the fewer onshore account set up needed,” Gregory Suen, investment director of fixed income at HSBC Global Asset Management, told industry publicationFund Selector Asia.

I dag, prior to the bond connect, om 473 foreign investment firms are active within China’s onshore bond market with investments totaling 800 milliarder yuan ($117 milliarder), ifølge PBoC estimates. Imidlertid, the true number of foreign firms holding Chinese debt is less than the official figures, as about 200 of the 473 are investors from the Chinese territory of Hong Kong, which Beijing deems foreign.

To cater to the anticipated trade flow, the Hong Kong Exchanges and Clearing and China Foreign Exchange Trade System formed a joint venture on June 7 called the Bond Connect Company to offer trading and support services to market participants of the bond connect.

‘Not a Case of Build It and They Will Come’

Beijing hopes demand for bond connect from foreign institutional investors will exceed the lackluster enthusiasm investors currently have for the Hong Kong-Shenzhen stock connection, where trading activity remains tepid.

But that’s far from a certainty.

The Hong Kong-Shenzhen stock connect has been open for six months, but logistical and demand issues remain. Clearing and settlement differences between Shenzhen and Hong Kong regulators have caused a sizable portion of trades to fail in recent months, ifølge en South China Morning Post report. Desuden, foreign demand for Shenzhen stocks so far hasn’t met Beijing’s expectations, with the technology-heavy Shenzhen issuers viewed as perhaps too risky for foreign investors.

It’s difficult to see bonds faring better. Despite Beijing’s opening up the domestic bond market to foreign investors last February—with no approval necessary as long as the investor has a local registered entity—foreign ownership of China’s bond market remains tiny.

Ved udgangen af 2016, foreign holdings of onshore bonds are only 1.3 percent of total market value, according to estimates fromthe Financial Times.

That means investors don’t believe the investment returns on Chinese bonds are enough to justify the heightened default risk of owning Chinese debt, which has fueled much of China’s recent economic growth and today sits at almost 260 percent of GDP, according to ratings agencyMoody’s Investors Service.

“For foreign investors, it’s not a case of build it and they will come,” concluded Rachel Ziemba, Managing Director at Roubini Global Economics, on CNBC. “They want to understand, they want to be paid for the risks they are taking on. In an environment where interest rates are rising in China, where the property market is flattening out a bit, that question mark about more information and drivers is going to be very important.”

The new U.S.-China trade deal signed during Chinese Communist Party leader Xi Jinping’s visit with U.S. President Donald Trump in April outlined a path for the U.S. credit rating agencies to begin operations in China later this year.

To foreign investors, that’s a step in the right direction, while also introducing new challenges. Foreign credit agencies will operate under supervision of Chinese securities regulators. During times of economic duress, can they remain independent and objective?

They came in the hundreds in their lime green T-shirts and placards. Lining up on the sidewalks, they made threatening gestures and hurled raucous abuse at a 1,200-strong parade contingent marching along a thoroughfare in Hong Kong’s central business district on April 23.

Members of the Hong Kong Youth Care Association and other communist front organizations, as well as pro-Beijing provincial clan associations, have in recent years been commonly sighted protesting local pro-democracy groups or practitioners of Falun Gong, a traditional Chinese spiritual discipline that is being suppressed on the mainland.

The pro-Chinese regime groups’ recent provocations at the Falun Gong event on April 23 cost a small fortune—The Epoch Times learned that protesters received over a million dollars in total from Chinese provincial authorities. These provocations are also representative of the overseas portion of abrutal persecution campaignthat was launched on the mainland 18 years ago by former Communist Party leader Jiang Zemin.

Jiang felt threatened by the popularity of Falun Gong, which was being practiced by 70 million to 100 million Chinese at its peak, according to state and practitioner estimates. Jiang vowed to “eliminate” Falun Gong, and spearheaded the creation of an extralegal apparatus, det 610 Kontor, for the express purpose of targeting Falun Gong. juli 20, 1999, the persecution began with arrests countrywide.

I Kina, hundreds of thousands of practitioners are being held in some form of detention, where they are met with brainwashing sessions and torture in a bid to make them give up their faith. Detained practitioners are also at risk of being killed to supply the Chinese regime’s booming organ trade, ifølge researchers of forced organ harvesting in China.

Outside China, the Chinese regime rallies pro-Beijing groups to harass Falun Gong practitioners and their public efforts to raise awareness about the ongoing persecution on the mainland.

An example of overseas Falun Gong outreach would be the events organized in Hong Kong this April 23 to mark the anniversary of a peaceful appeal in Beijing on April 25, 1999. Om 1,200 practitioners from Hong Kong, Taiwan, and other neighboring Asian countries had gathered at Edinburgh Place, a public square near Victoria Harbor, to perform slow-motion exercises and hold a rally to denounce the persecution. Senere, the practitioners carried banners that call attention to the persecution as they marched through Central district to the Chinese Liaison Office.

Hundreds from various Hong Kong pro-Chinese regime groups were at hand to protest the Falun Gong activities. Most prominent were members of the Youth Care Association in their lime green shirts, placards with anti-Falun Gong slogans, and loud heckling voices. Om 50 Youth Care Association members donned red shirts and beat out cacophonous communist “red” tunes on military band instruments.

The Youth Care Association was founded in 2012, and is widely believed to be a front organization for the 610 Kontor. The Youth Care Association has its headquarters in the same building as the Shenzhen branch of the 610 Kontor, according to Hong Kong newspaper Apple Daily.

The Youth Care Association’s recent Maoist antics infuriated the head of a local pro-Beijing clan association, and inspired him to expose details of the Chinese regime’s support to this newspaper. Because the clan head is closely acquainted with officials from the Liaison Office and Beijing and wishes to protect his identity, he wants to be referred to in this article as “Mr. Lam.”

Hr. Lam noted that the pro-Chinese regime groups’ harassment of Falun Gong on April 23 was the largest in scale to date. He learned from a high-ranking official from the public security bureau in Shenzhen, the Chinese city neighboring Hong Kong, that the Chinese regime spent over HK$10 million (om $1.28 million) to finance this single protest operation.

Hr. Lam said that the protest money was drawn from the “social stability maintenance” funds of Chinese provinces near Hong Kong, such as Guangdong and Fujian, and handed to the participating clan associations in Hong Kong or mainland Chinese protesters.

The Chinese regime spends tens of billions each year on “social stability maintenance,” or domestic security enforcement, which includes the suppression of human rights activists and spiritual groups like Falun Gong.

The Chinese ministry of finance places the 2016 expenditure at 166.8 milliarder yuan (om $26 milliarder), althoughanalysts saythat the figure, after including spending on extralegal detention facilities or on hired thugs, could be much higher.

Hr. Lam said that each of the protesters were paid between HK$500 to HK$600 (om $64 til $77) for their attendance.

The heads of the different groups received substantially higher payouts. For eksempel, the leader of a local Fujian clan association received HK$2 million (om $260,000) from the Fujian public security authorities. The clan leader had already made a small fortune from organizing anti-Falun Gong activities in Hong Kong, ifølge hr. Lam, citing the clan leader’s ownership of two coffee shops and the Rolex watch worn by the clan leader’s wife as signs of his ill-gotten wealth.

But the Chinese regime’s dollars don’t easily buy support in Hong Kong these days, Hr. Lam said. Many locals now have a good understanding of Falun Gong and don’t wish to join the regime’s persecution effort. Several members of the participating Fujian clan association also opted out of harassing Falun Gong on April 23.

New York has displaced Hong Kong as the world’s top destination for initial public offerings (IPOs) of stock during the first three months of 2017.

A lack of major stock offerings sent Hong Kong—the main Stock Exchange of Hong Kong (HKEX) and the Growth Enterprise Market (GEM) combined—to a distant fourth place, behind New York, Shanghai, and Shenzhen.

Global IPO activity was brisk overall in the first three months of 2017, med 369 total global IPOs raising $33.7 billion in proceeds, according to EY data. The proceeds are a 146 percent increase from the same period in 2016.

The New York Stock Exchange led the way with $9.6 billion in total value from 14 issuances during the first quarter. Hong Kong’s $5.3 billion in first quarter IPO value was an 11-year low, according to data from Thomsen Reuters.

Hong Kong was the leading destination for company stock offerings in 2016 og 2016. Sidste år, it hosted $25 billion in total listing value and 115 tilbud. Its 2016 listing value was almost double that of New York, which listed $13.6 billion of IPOs, according to data compiled by EY.

Allowing Dual-Class Shares

Hong Kong Exchanges and Clearing chief executive Charles Li announced at a press conference in early January that the exchange is consulting stakeholders on the launch of a third stock exchange in Hong Kong in addition to the main HKEX and technology-focused GEM, according to the South China Morning Post.

The most-talked about reform will likely be the allowance of dual-class share structure. Dual-class structure, which allows companies to have two classes of common stock with different voting rights, is popular with startups but is currently banned by Hong Kong exchanges. The allowance of dual-class listing was proposed by the Hong Kong exchanges back in 2014, but it was ultimately rejected by the Securities and Futures Commission, the city’s securities regulator.

A single mega-IPO could often swing the fortunes of a stock exchange.

A third stock exchange in Hong Kong, if approved, would likely host companies with dual-class share structures.

Blockbusters Determine Winners

Hong Kong’s rise as a leading global IPO destination over the last few years has been a product of increased IPOs of Chinese companies looking to expand their access to capital by tapping foreign investors. Prior to establishment of the recent Hong Kong-Shanghai and Hong Kong-Shenzhen stock connect portals, foreign investors had limited exposure to Chinese companies.

The IPO of a single major company could often swing the fortunes of a stock exchange. I 2014, Chinese e-commerce giant Alibaba Group Holding chose to list on the New York Stock Exchange instead of Hong Kong, specifically because Hong Kong exchanges rejected Alibaba’s dual-class share structure. Alibaba’s historic $25 billion IPO, which was the biggest ever, single-handedly propelled New York to the top of IPO rankings in 2014.

While the Asia-Pacific region led the way in IPOs during the first three months of 2017, activity was spread across several regions. Greater China was the busiest, followed by Japan and Australia. The biggest Asia IPO by proceeds was that of media company Sushiro Global Holdings Ltd., which raised $611 million in Tokyo.

The United States will likely challenge Asian exchanges for IPO superiority during the rest of 2017 due to several highly anticipated technology IPOs. AirBNB, Palantir Technologies, and Uber are all 2017 IPO candidates following Snapchat’s successful $3.9 billion IPO in March.

Last year was an especially underwhelming year for the U.S. IPO market. This was mainly due to lackluster stock market performance during the first half of the year and the mid-year shock of U.K.’s decision to leave the European Union. After a slight bounce back, investors were skittish ahead of the U.S. valg. The volatile market conditions of 2016 forced some companies to push back their IPO plans.

The biggest U.S. IPOs in 2016 were cross-border IPO of Chinese logistics company ZTO Express, insurance company Athene Holdings, and real-estate investment trust MGM Growth Properties.

Next year may become the biggest IPO year ever. Determination of 2018’s top IPO destination will likely rest on how Saudi Aramco chooses to list its shares.

Saudi Aramco is Saudi Arabia’s state-owned oil company. As part of the Kingdom’s plans for privatization, Saudi Aramco is exploring a 5 percent share offering in 2018. With an overall valuation of up to $2 billioner, Aramco’s 5 percent IPO will likely become the biggest in history, raising up to $100 billion in proceeds.

The Saudis are exploring several listings across the United States, Asien, U.K., as well as locally on the Tadawul Stock Exchange in Riyadh. How Aramco decides to allocate its massive stock sale will determine 2018’s top global IPO destination.

After three straight years of rejection from the prestigious and widely benchmarked MSCI Emerging Market Index, Chinese domestic A-shares may finally make the list in 2017.

Kicking off its annual review, MSCI sent a revised proposal to fund managers that could pave the way for Chinese onshore stocks to be included in the coveted index.

But even if Chinese A-shares do receive the green light from MSCI—a decision is expected in June—their inclusion cannot be considered a triumph for most Chinese issuers. The latest proposal cuts the number of companies from 448 til 169, and only gives Chinese A-shares a 0.5 percent weighting in the index. It’s a symbolic gesture, i bedste fald.

Half a Percent

Theoretically, the inclusion of Chinese A-shares in the Emerging Market Index will funnel more foreign money into the $7 trillion Chinese stock market and give onshore markets more credibility amongst global investors.

But MSCI’s latest proposal is extremely watered down for Chinese companies. The new recommendation abandons the previous proposal based on Beijing’s Qualified Foreign Institutional Investor (QFII) framework and will instead use a framework based on Hong Kong’s stock market connection with Shanghai and Shenzhen exchanges. This proposal, through the stock market connection, eliminates some of the restrictions inherent in the QFII framework such as investment quotas and eases others such as capital repatriation.

But the proposal also cuts the list of A-share companies from 448 til 169, which limits inclusion to only the large-cap companies that are already accessible today via the exchange connect. In practice, the proposal likely won’t subject a larger swath of the Chinese market to foreign investor scrutiny—only the biggest companies already exposed to global investors will be included.

Under the new consideration, yuan-denominated A-shares would only make up around 0.5 percent weighting within the Emerging Market Index, half of the previously proposed level. Desuden, the offshore yuan will be used for calculations, as opposed to the onshore yuan.

Another stipulation by MSCI is that all companies whose stock has been suspended for more than 50 days would be excluded from the index. Two years ago during China’s stock market crash, mere end 1,000 companies suspended trading of their shares.

(Kilde: MSCI)

“It feels like the MSCI is making a concession, making it easier for A-shares to be included, so I think the move boosts the possibility,” Hao Hong, equity strategist with Bocom International Holdings Co., told Bloomberg in a report.

But while the move increases the likelihood of inclusion within the MSCI Emerging Market Index, much of the benefit under the original proposal would be eliminated. MSCI will make the final determination in June, after feedback from fund managers.

Years of Rejection

The MSCI Emerging Market Index was created in 1988 to track performance of emerging market stock markets. It currently consists of 23 emerging market economies and is one of the most widely used benchmarks for emerging market performance.

There’s an annual review to determine whether new geographies should be added. The last new inclusion occurred in 2014, when the United Arab Emirates and Qatar were added to the index.

I øjeblikket, Chinese companies consist of a little more than 25 percent of the MSCI Emerging Market Index. Imidlertid, those companies are all listed in Hong Kong or the United States through ADR (American depository receipt) shares. China A-shares, or domestic listings denominated in onshore yuan which make up the majority of the Chinese stock markets, are not part of the index. A-share stocks are usually traded on the Shanghai and Shenzhen stock exchanges. Until the cross-border trading link Hong Kong-Shanghai Stock Connect began operation in late 2014, foreigners were largely barred from owning Chinese A-shares.

To år siden, Beijing’s increased support of Chinese A-shares and an expectation of more international investment helped fan the flames of a market frenzy in the spring of 2015. The Chinese stock market bubble burst a few days after MSCI announced that China wasn’t yet ready for inclusion.

Siden da, China had been slowly loosening market restrictions as its currency has gained greater acceptance worldwide, and it created the QFII scheme to allow foreign firms the ability to access Chinese capital markets. A new stock market connect was opened between Hong Kong and Shenzhen—its second biggest stock exchange—in late 2016.

But MSCI’s decision last year to reject A-shares’ inclusion was still a surprise to some investors, as Goldman Sachs, Citigroup, and HSBC all expected China A-Shares to join the global index.

I 2011, Chen Junjie (roughly “Jwin-jyeh”), an average, law-abiding Chinese citizen, had been living the coastal province of Guangdong for nine years when he decided to apply for local residence.Despite everything else seemingly being in order, the Guangdong police turned down Chen’s application without explanation. He also encountered difficulties with his housing loans and driver’s license.It was only in 2015 that, in a Kafkaesque episode, the authorities informed Chen that the source of his bureaucratic woes was a three-year prison sentence he had supposedly served for a 2008 attempt to rob a bank in the Panyu District of Guangzhou, the provincial capital.Read MoreA Chinese Woman Had Her Identity Stolen 12 år siden. This Is What Happened When She Found Who Did It.“I’ve never been to Panyu and I’ve not been in jail either,” Chen, who is from neighboring Hunan Province and lives in the megalopolis of Shenzhen, protested in an interview with The Paper, a state-run web publication based in Shanghai that reported the case on May 17.By pulling some connections, Chen was allowed to confirm that his identity had been stolen by the now-released convict, to whom he bore no resemblance.Chen’s misfortune represents an embarrassing oversight, if not evidence of corruption, by the police, court, and prosecuting body, as they ought to have confirmed the real convict’s identity.
Faktisk, lawyer and scholar of criminal law Mao Lixin told The Paper that such a case like Chen’s should be “virtually impossible,” and that he suspects “the personnel investigating and handling the case neglected their duties.”To make matters worse, police seemed to work at a snail’s pace in correcting Chen’s record, even after getting his fingerprints. “I’ve called many times to check up and every time they said they’re still processing the matter,” han sagde.Netizen comments expressed sympathy for Chen, and following media coverage, the police announced promises to “process his case as soon as possible.”Read MoreParents of Children Poisoned by Tainted Chinese Vaccines Suppressed by Regime Censors

The Chinese medical system requires patients to pay up-front, meaning that for hundreds of millions of people, a life-threatening injury or disease can be financially crippling.Even with insurance, patients and their families still have to foot the bill first and be reimbursed in the future. Faced with such dire costs, many Chinese have opted to skip out on professional treatment, and some have been driven to attempting dangerous and dubious operations on themselves or relatives.Cobra PoisonA man in Hebei Province, northern China, who had expended all his savings and was deep in debt from paying for treatments to cure his daughter of aplastic anemia, decided to use a poisonous snake to combat the ailment.Wang Jingshuai at his home in Hebei Province demonstrating how he used a cobra to cure his daughter. (via Tencent)Closeup of the cobra. (via Tencent)Wang Jingshuai, the father, got a cobra imported from the south after hearing of an unconventional treatment method that calls for one toxin to fight off another, online news outlet Tencent reported in January. He had it bite his daughter on the wrist.Unsurprisingly, the girl, who has been sick since 2011, did not get better from the snakebite. I stedet, she began to feel severe discomfort and had to be sent to the hospital immediately.Burning Off LeukemiaTwenty-four-year-old Jia Binhui, a man in the southwestern province of Yunnan, could not afford treatment for his leukemia, so he decided to cook himself over red-hot coals to destroy the cancerous cells.Jia Binhui cooking himself to cure his leukemia. (Sina Weibo)Jia had leukemia since 2013 and attempted his backyard treatment in April 2015, as detailed in his posts on Sina Weibo, a popular Chinese social media website.“Experts say that temperatures over 42 grader celsius (107.6 degrees Fahrenheit) can kill cancer cells,” Jia wrote.Jia lay down on a set of bamboo poles suspended over his fire in half-hour intervals, resting to tend the flames. His Weibo posts indicated that he would go to the hospital after a few days of “treatment” to see if his method worked.Jia Binhui setting his backyard fire. (via Sina Weibo)Amputating Own LegsWhen Zheng Yanliang, a farmer in Hebei Province with savings worth about 20,000 yuan, found that it would cost 1 millioner yuan (om $154,000) plus a 300,000 deposit for an attempt to cure his leg condition, he gave up on professional medical services and took a knife and hacksaw to his damaged limbs.Zheng Yanliang demonstrates how he amputated his leg. (via Netease)Both of Zheng’s legs were affected with a stroke-like symptom that caused massive clotting and were destroying the limbs, the state-run Global Times reported. This was highly debilitating as he was the breadwinner in his family before being diagnosed with the condition in 2012.The embolism had progressed to the point that Zheng’s bones were visible and maggots were crawling out of the rotting flesh.
I april 2012, without telling anyone, Zheng bit hard on a towel and spent fifteen minutes sawing off his right leg.He succeeded in removing his leg, but in the process broke his saw and lost four molars from biting too forcefully on the towel. Den næste dag, his left leg began to separate starting from the ankle.Zheng’s story received widespread media coverage, and he eventually received enough donations to have him amputate his remaining leg in a Beijing hospital.Zheng Yanliang at his own home. (via Netease)Herbal Smoke
i november 2014, villager Wei Shufu from Yunnan set up an herbal medicine bed for his daughter, hoping that the fumes would cure his daughter’s blood disease.Wei’s daughter. (via Netease)Wei’s daughter was diagnosed with an inherited blood disease in 2013, imidlertid, the bone marrow transplant needed for her treatment would have required a 300,000-yuan deposit (om $46,000), with further 50,000 til 60,000 yuan a year for blood transfusions. The family’s annual income was only 40,000 yuan, as Wei described on his Weibo account.Lacking alternatives, Wei built a special elevated bed with a variety of herbal plants gathered from nearby mountains as prescribed by a method he found online. The treatment would be carried out by burned a fire under the bed and having the girl lie on it while breathing in the “herbal smoke.”Wei’s Weibo account was banned on the charge of spreading false information after he posted pictures of the treatment.Wei Shufu’s daughter lying in the herbal bed made by her father. (via Netease)Wei Shufu trying to cure his daughter with “herbal smoke.” (via Netease)Wei tends to the herbal bed. (via Netease)Suicide to Escape DebtWhen all else fails, some Chinese are ready to pay the ultimate price to cover their family’s medical bills.Yang Gong (pseudonym), a divorced man from Shenzhen in southern China with two children and 170,000 in unpaid debt, found himself in a dilemma when his younger son was diagnosed with bone cancer.Because he was a migrant worker without officially-recognized residence in Shenzhen, Yang, whose story was reported by Southern Metropolis Daily in October 2015, could not cash in on the state insurance system.Additionally, his son was his second-born child, in contravention of the then-one-child policy. This barred him from received any insurance benefits at all.Yang Zhensheng, son of Yang Gong. (via Southern Metropolis Daily)Under immense pressure, Yang committed suicide at his workplace.This was “a path that I chose for myself,” Yang Gong explained in a series of suicide notes. “I simply don’t have the money. I can’t watch this ordeal drag out endlessly.”Following his death, authorities sharply reduced the amount Yang’s son would have to pay for treatment given his status as a second child. But the father’s sacrifice could only go so far—even with family members taking debt to support him, the younger Yang still faces over 100,000 yuan of unresolved bills.

Amidst a backdrop of souring loans and diminishing reserve ratios, Chinese banks last week announced the least encouraging quarterly earnings in almost a decade.Facing a challenging domestic and international economic environment, the banks’ underlying profits are deteriorating. The rising figure of official and nonofficial toxic loans are evaporating reserves and without drastic cuts to minimum reserve requirements, all but guarantees future losses.It may be time to say goodbye to the industry’s string of quarterly profit increases and 10 percent dividend yields.For years, Chinese banks managed earnings by adjusting provisions for bad debt which have been comfortably above the regulatory minimum. That threshold sits at 150 percent of existing non-performing loans (NPLs), which Beijing lowered from 200 percent to help banks’ bottom lines and free up capital.A Loan by Any Other NameChina’s official bad loan ratios sit between 1.5 procent og 2 percent at major banks. That figure is widely recognized as understated—even the most bullish investors peg the true NPL ratio to be in the high single digits.Charlene Chu, partner at Autonomous Research Asia and head of its China banks research group, estimates that NPLs are as high as 22 percent system-wide, according to a recent interview with Barron’s Asia.The discrepancy between these figures—and what makes calculating China’s NPL proportion so difficult—lies in what one considers to be debt. Chinese banks and regulators, and many mainstream Western research firms, analyze NPLs within a bank’s loan portfolio.Nobody wants to be the first to report a profit decline after so many years of growth.— Richard Cao, Guotai Junan Securities

But for China, a large amount of credit resides outside that scope, in the form of wealth-management products (WMPs). WMPs are a catchall for financial instruments that may reside on or off balance sheet to provide new financing or to service existing debt.These products are structured differently than loans, which utilizes the bank’s existing balance sheet. In a typical product, the bank contributes capital to a partnership entity with non-bank counterparties such as securities firms or investment trusts, to issue credit to a struggling company. Instead of a loan, the bank holds an investment in an unrelated partnership.The structure is somewhat similar to a collateralized loan obligation (CLO) or collateralized debt obligation (CDO). But here, instead of raising mostly outside capital as would a CLO, the bank could hold majority of both debt and equity.Such financial engineering allows banks to dress up their balance sheets. Loans masquerade as investments, which have a lower risk weighting than debt under Chinese capital adequacy rules, allowing the bank to report a lower NPL ratio and set aside less reserves.Such WMPs are often the only credit available to “zombie” state-owned enterprises facing restrictions on formal borrowing, such as those in the steel, cement, and manufacturing industries.Autonomous believes that total outstanding WMPs grew 57 procent i 2015, with off-balance sheet WMPs up 73 procent. “If WMPs grow just 25% til 30% this year, they will be twice as big as the combined amount of structured investment vehicles and conduits that blew up on Western banks during the global financial crisis,” Chu said.Reserve Ratio Cut ExpectedThe banks, i mellemtiden, struggle to meet even the official NPL reserves on their books.To eke out a first quarter profit gain, two of the four largest state-controlled Chinese banks had to lower bad loan provision at March 31 to below the regulatory minimum.Bank of China and Industrial and Commercial Bank of China Ltd. (ICBC)’s buffer has fallen to 149 procent og 141 procent, henholdsvis. China Construction Bank is slightly above at 152 procent. The bank with the most NPLs, Agricultural Bank of China, has a coverage ratio of 180 procent.“The regulator is probably tolerating such a temporary breach and a cut in the ratio is on the way,” Hou Wei, a Hong Kong based analyst at Sanford C. Bernstein, said in a Bloomberg report. Nomura research indicates that China’s reserve ratio could be cut from 150 percent to 120 percent without material risk to China’s financial system.During last week’s earnings disclosure, China Construction Bank Chairman Wang Hongzhang said that it was possible that the reserve ratio may be cut to between 120 og 130 procent, but qualified that statement by saying the degree of ratio cuts may not be standard across the industry.The temptation is there. According to BNP Paribas research last year, a small cut of minimum reserves of 10 percent points would boost bank earnings by 7 percent across the industry.Reckoning Ahead?Cutting reserves is a double edged sword. It can boost earnings and allow a bank to lend more, but it weakens the bank’s capital and its ability to withstand loan losses—which is on the rise.The official NPL ratios are at their highest levels in several years. At this point, relaxing loan reserve ratios in the face of deteriorating asset quality sends a bad message and puts into question the intention and role of Chinese regulators, a Fitch Ratings note suggested earlier this month.But even if Beijing cuts reserves down to the 100 percent level pre-financial crisis, is it enough? If the current ratio of official NPL more than doubles to 4 eller 5 procent, loan losses would carve into banks’ retained earnings and tier-one capital, estimates Sanford C. Bernstein.“For the first quarter, [the banks] can still maneuver a bit by cutting costs here and there, and end up with zero profit growth and still maintain the minimum NPL coverage ratio—but for the full year nobody can achieve both,” Richard Cao, analyst at Guotai Junan Securities in Shenzhen, fortalte Bloomberg.“Nobody wants to be the first to report a profit decline after so many years of growth,” Cao added.But they may not have a choice. Quarterly earnings and dividend levels—which the banks hold sacrosanct—will be cut.After all, nobody wants to be the first to trigger a global financial crisis either.

Chinese telecom equipment giant ZTE Corp. was hit with trade sanctions from the U.S. Department of Commerce last month for allegedly violating laws restricting exports of American made technology to Iran and other nations.Trading of ZTE’s shares was suspended for a month on the Shenzhen Stock Exchange, and is down more than 3 percent since April 7 when trading finally resumed.The sanctions were temporarily lifted until June 30, assuming ZTE continues to cooperate with U.S. authorities. The increased scrutiny will likely expose other Chinese firms to similar bans, potentially introducing volatility and downward pressure on Chinese stocks—with the Shanghai Composite already down 13 percent year-to-date.
USA. government has been investigating ZTE’s activities dating back to 2012. The company allegedly created shell entities to sell software and telecom equipment containing components made in the United States to Iran, which is in violation of U.S. economic sanctions.
On marts 7, USA. government barred manufacturers from selling U.S.-made electronic components to ZTE. The sanction was a major setback to ZTE’s global operations. The company delayed releasing its 2015 financial statements by around two weeks to assess its bottom line impact, and three top executives left the firm. Shi Lirong, CEO since 2010, and two executive vice presidents stepped down from their posts on April 5.The case is ongoing and ZTE isn’t in the clear yet. “The investigations are still in progress, and may result in criminal and civil liabilities under U.S. love,” the company announced April 6 when it released its 2015 earnings.A Critical CaseThe Shenzhen-based ZTE, China’s second largest telecom company, relies on key U.S. components for much of its equipment. “In the information and communications technology sector, Chinese companies are unable to wholly rely on self-production,” an equities analyst in Hong Kong told Caixin, a Chinese business magazine.“China still lags behind in key areas, such as the production of computer chips, storage devices, electronic devices used in telecom towers and other advanced materials.”An unfavorable outcome to ongoing investigations could bar procurement of critical components from U.S. vendors such as Qualcomm for smartphone chips and Xilinx for base station chips, a catastrophic result for ZTE’s global business.ZTE currently has less than 5 percent global market share on mobile phones, and its latest smartphones all use Qualcomm chips. It’s also a major player in networking equipment such as base stations and switches.The investigations are still in progress, and may result in criminal and civil liabilities.— ZTE

In a research note to investors, Nomura Securities last month estimated that between 10 og 15 percent of ZTE’s components are sourced from U.S. virksomheder. Of those components, ZTE would be able to secure alternative vendors to cover only 30 percent of its needs from U.S. virksomheder, according to Commerce Department estimates. That means production on some products would be halted, severely crippling ZTE’s ability to compete.Huawei Implicated?The Commerce Department released internal ZTE documents from 2011—marked as “top secret internal use only”—which detailed its plans to set up seemingly unrelated intermediary companies to facilitate exports to countries such as North Korea and Iran.To justify the plan, ZTE analyzed similar trading structures set up by a firm with the alias F7, a competitor to ZTE. A document described how F7 had so-called “cut-off companies” to “sign contracts for projects in embargoed countries.”The document admitted that once American authorities notified Congress of F7’s business interests in embargoed countries, F7’s ability to do business in the U.S. was hampered. “In 2010, F7’s proposal to acquire U.S. 3Leaf Company was opposed by the U.S. government, citing the impact to U.S. national security,” the memo said.The company F7 as described by ZTE sounds suspiciously similar to none other than its biggest rival, China’s No. 1 telecom firm Huawei Technologies.
I 2010, the Justice Department blocked Huawei’s purchase of 3Leaf Systems due to national security concerns. ZTE’s documents also claimed that F7 had an ongoing joint venture with U.S.-based digital security firm Symantec. Huawei apparently teamed up with Symantec in 2008 to jointly develop computer network security products, and the alliance was terminated by Symantec in 2012 on grounds that its partnership could jeopardize Symantec’s relationship with U.S. government agencies.ZTE also described the company as a formidable competitor. “This [F7’s] cut-off company’s capital credit and capability are relatively strong compared to our company; it can cut off risks more effectively,” dokumentet læse.
Huawei, with annual revenues of more than $60 milliarder, is much larger than ZTE and has a bigger footprint in the United States as a leading smartphone maker. It would be hardly surprising if ZTE sought to replicate Huawei’s business practices.The Pentagon and U.S. Congress believe Huawei has Chinese military ties, and the company has been accused of forging government documents and hacking government e-mail systems. I 2014, the Washington Times reported that Huawei attempted to breach the NSA’s computer network.The ongoing ZTE case could signal that the U.S. government is increasing investigation and enforcement of trade embargo rules. And Chinese companies, especially ones in the engineering, construction, and financial sectors could be in the crosshairs.As early as 2010, the Washington Post reported that U.S. intelligence believes several Chinese companies and banks were engaged in exporting restricted technologies to Iran, possibly for use in its military missile program.Beijing Aeronautical Manufacturing Technology Research Institute, owned by Chinese aerospace firm Avic, was placed on a watchlist in 2014 by the Commerce Department for its business with Iran.While certain U.N. sanctions against Iran were eased recently, USA. continues to maintain unilateral economic sanctions against Iran. As of April 17, no official U.S. investigations have been announced for Huawei.
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Shopping abroad for safer and cheaper products has become common for large numbers of Chinese. Now the Chinese government wants to curb that cross-border flow of goods by raising customs fees and import taxes. This will not only hurt Chinese shoppers but also goes against China’s commitments when it joined the World Trade Organization (WTO).Chinese authorities implemented a new tariff policy on April 8, which would apply to products imported through e-commerce, and also goods physically brought across the border. While the 5,000 yuan limit on imports of duty-free goods purchased at overseas ports of entry has been increased to 8,000 yuan, anything over that amount will be slapped with an additional tax rate that varies depending on the kind of product.
For eksempel, the tax rate for food and beverages, certain electronic products, gold, silver, and furniture, was raised from its previous level of 10 percent to 15 procent. Clothing and accessories increased from 20 percent to 30 procent. Some alcohol, tobacco and cosmetics were raised from 50 percent to 60 procent.WTO PromisesA decade ago, China tried by all means to join the WTO, making a wide range of promises to do so. The most important was to reduce its high tariffs so that Chinese people could afford more imported goods.China was, no doubt, the biggest winner when joining the WTO, with its exports hitting record highs and foreign exchange reserves climbing sky-high. Imidlertid, while Western countries opened their gates, China continues to raise tariff barriers to block foreign goods from getting into the country. Chinese consumers can only purchase foreign goods through cross-border travel. This is contrary to WTO policy and seriously undermines China’s reputation.Chinese ShoppersSince China has such extremely high tariffs, prices of imported goods are significantly higher in China than in their countries of origin. I de seneste år, many Chinese have gone overseas to shop.According to incomplete data from China’s Ministry of Commerce, Chinese people’s overseas spending was over 2 billion yuan ($308 milliarder) i 2014 og 2015.The number of Chinese traveling overseas has grown by 20 percent each year for the fifth consecutive year, reaching 180 million, or a per capita consumption of $652, and ranking first in the world, as reported by Fortune Character Institute’s China Luxury Report.When Chinese people return from overseas, their bags are stuffed with their favorite items, and often those of their friends. These range from luxury watches to saucepans, rice steamers, brand-name clothing, luxury leather goods, milk formula, perfume, and even toilet seat covers.Made in ChinaWith Chinese-made goods sold all over the world, Chinese people should not have to travel abroad to shop. But what’s available in China is either far overpriced or a poorly-made imitation. That’s why Chinese consumers have lost confidence in Chinese-made products and have turned into an army of overseas shoppers.In addition to brand and quality, price is another important consideration. Outlets in U.S. suburbs are Chinese tourists’ favorite go-to places. There they find all kinds of dazzling well-known brand products, including big-name apparel and leather goods that even without discounts are only about one third of what they cost in China.Even some “Made in China” clothing is sold in the U.S. at a much lower price than in China. It’s a bit odd, given that these were shipped long distances from China, and the U.S. is a country with higher per capita income and higher labor costs. Yet, Americans are able to enjoy inexpensive, quality products from China, which Chinese cannot!Chinese tourists, including many Shenzhen citizens, love to shop for brand products in Hong Kong, just adjacent to Shenzhen. Imported baby milk formula is often sold out as soon as it hits the shelves. Some Western countries even had to set quotas on baby formula specifically because of the influx of Chinese customers.Shopping overseas does not necessarily mean that Chinese blindly worship foreign-made brands or that they’re carelessly squandering their money. Chinese used to support domestic products and local enterprises. But in recent years, and especially after the melamine-tainted milk powder scandal, they have rightfully become distrustful of domestic goods.The government’s new “protection” tariff may actually have some unexpected negative consequences. By raising taxes on cross-border imports, it lessens the motivation for Chinese enterprises to innovate and to improve product quality. Med andre ord, it protects obsolete production practices, as well as the spread of fake and poorly made products.Helping Chinese consumers obtain quality merchandise at a price they can afford, without them having to go abroad and cause trade imbalances, should be the Chinese government’s priority. I stedet, the government raises tariffs, an open attack on Chinese cross-border shoppers.This is an abridged translation of Cai Shenkun’s Chinese article, posted on the author’s personal blog. Cai Shenkun is a well-known Chinese economist and blogger. He writes columns for a number of prominent business websites and was named a Top Ten Influential Blog Writer on Phoenix Television’s website for three consecutive years.

This week, a joke compares the Chinese Communist Party to a high-functioning underworld mob, while Internet users dredge up old People’s Daily reporting to show how for Chinese state media, every day is April Fool’s. The difference is that instead of being once a year, in China fooling the public happens “any time, any place, over any issue,” and unlike April Fool’s jokes, the Party “never tells you that you’ve been taken in.”Joke of the WeekWhen local business owner Mr. Sun went to pay his monthly protection fee to the mafia boss, right outside he saw a sign saying: “Ideological security must be guaranteed.” After meeting the Don, Hr. Sun was confused: “What does ‘ideological security’ refer to?” The boss replied: “The ideas contained therein are rich indeed. But to put it simply, it’s about making everyone believe that the activities of our mafia are legitimate business.” Hr. Sun was still confused: “But how is that linked with ‘ideological security?’” The boss replied: “It’s straightforward. If all of you buy that ‘ideology’, then we’re secure.”—FacebookFooling Professionals
Den april 1, Xinhua posted on its official Weibo page: “April Fools’ Day doesn’t correspond with China’s traditional culture and core socialist values… Hopefully everyone won’t believe, create or spread rumors.”Below is a selection of replies from Chinese Internet users.“Join the right party and every day is April Fool’s.”“The post is a good example of unhealthy competition within the same industry.”“Wow, it’s so rare to see some sense of humour out of Xinhua’s mouth… What? You mean Xinhua is serious?”“Specifying a single day to fool others, and in the end letting others know how they were fooled—I completely agree that such an amatuer fooling method fails to correspond with China’s socialist values. I Kina, fooling should be carried out in the same manner as Party mouthpieces: fool people any time, any place, over any issue, and never tell them that they were taken in. Only this deserves to be called a core socialist value.”The famous lie by the People’s Daily during the Great Leap Forward: that yieldper unit area of rice was over 40,590 pounds.Best of Social Media@redfireage: “The United States only took about 300 years to build the most powerful nation out of nothing. På den anden side, China only took several political movements to destroy a 5000-year-old civilization, creating poverty and a cultural desert. The United States constitution was written for its people and nation, while the Chinese Communist Party’s revolution was for its leader and dictatorship.” —TwitterOn controlling speechZhang Kangkang: “It seems that there are many different kinds of newspapers, but indeed there is only one. It seems that there are many different voices, but indeed there is only one. It seems that one can have numerous ideas, but indeed only one is allowed in practice. If necessary, they [the Party] will try to transform every human into a single model. They have absolute power to do this, and the regime is like a effective machine specially designed to do it, producing ‘slaves’ without a second thought.”—Twitter

Shenzhen’s Odd BanIn late March, the Shenzhen government suddenly initiated a 100-day movement banning motorcycles, and restricting the use of electric scooters. Over 18,000 bikes were confiscated by police in 10 days, including the impounding of 1,200 courier tricycles and detention of 50 couriers. Violence was reportedly used by police. Couriers who relied on such vehicles for their jobs were forced out of work.The abrupt, violent and very likely illegal “law enforcement” quickly drew public outrage. An article online told a story of a young man who set upon his own vehicle when chased by police, yelling: “I would rather smash my bike myself than give it to bandits.”

The article also revealed an unconfirmed official document which outlined a series of rewards for police to confiscate vehicles: each tricycle impounded was to be rewarded with 100 yuan ($15.4), each motorcycle with 300 yuan ($46.3), and each scooter 30 yuan ($4.6).The strange enforcement incident was the subject of heavy attack online. An internet user posted: "[The government] is always incapable of managing the country, but never short of new ways of disturbing civilians.”Another highly-forwarded remark said: “Why are motorcycles never banned in Taiwan? The answer is that there is a vote behind each motorcycle rider, so no government dares do that. Imagine how many Shenzhen workers who rely on motorcycles or scooters have said ‘I don’t care about politics.’ People will now finally learn that politics is something they can’t ignore.”

A family in southeastern China likes to plan ahead. With plenty of money to spend, and little regard for China’s laws about grave spaces, they bought up land enough to bury 26 relatives, only three of whom have died since the couple started their project.
I Kina, space in cemeteries is extremely limited for ordinary citizens, and must be rented for decades at a time as the land ultimately belongs to the state. The construction of lavish tombs has thus become something of a status symbol among those with wealth and influence.
I 2010, a couple surnamed Chen—well-known as successful entrepreneurs in Fujian Province—bought a 3,000-square-meter plot from destitute farmers in the village of Chenguang. The variety of tombs constructed there will be sufficient to store the remains of four generations in the Chen family.Some tombs in the surrounding locales are oval-shaped, turret-like constructions. Some have walls ten feet high and feature marble staircases, with gardens and lawns surrounding them, state media reported.
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MERE:CHINA TRANSLATED: Mafia, Vaccinations, and a Most Unfair FineNewly-built coffin pits in Fujian Province. (via Xinhua)The names and lifespans of the three deceased family members from the Chen family are already marked there in black. The living, også, have their places of eternal rest laid out for them and their names marked in red.Local regulations forbid the construction of private tombs, but for the Chens and other wealthy families in China, this is empty ordinance.
I 2015 local Fujian authorities and the forestry department dispatched workers to cover up and bury the illegal tombs, including those belonging to the Chens, Xinhua reported. Soon thereafter, imidlertid, the Chens and other families simply ordered restoration work done to their burial grounds. Local authorities have not bothered them since.
MERE:Former Shenzhen Deputy Mayor Mysteriously Falls to DeathThe private graveyards belong to the Chens and other families. (via Xinhua)